Abstract: Pension expenses constitute the largest social protection programs in Europe. Yet, current reforms tend to reduce the size of public, pay-as-you-go pension provisions, while creating room for capitalized retirement-income institutions. Although global, this trend towards growing financialization of retirement income follows different trajectories and takes different forms across countries. This paper focuses on two dimensions seldom tackled by the widespread literature on (pension) financialization: federalization and decentralization. This issue matters due to the political and financial significance of regional and local authorities in Europe – which contrasts with their relatively weak regulatory power in this domain. The mutually constitutive interactions between federalization, decentralization and pension financialization are empirically analyzed through a situated case study: the early financialization of local public pensions in Belgium. The analysis retraces the situated “conditions of possibility” of this process in a multilevel setting – i.e. the historical sequence of events that rendered this outcome possible. Three main conclusions are highlighted. The first one regards the prominent role played by two recent federal reforms in the institutionalization of occupational pensions at the local level. The second issue stresses the active involvement of two complementary pensions financialization intermediaries: local governments and formerly public financial institutions. The last topic relates to the interregional implications of the financialization of local pensions, as well as its hypothetical consequences on a future decentralization of pensions in this bipolar and centrifugal federation.
Keywords: financialization, pension, local governments, federalism, marketization, privatization, Belgium
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