In this section we will give an account of the reforms of the pension systems in the four countries treated as specific cases.
14.5.1 Pension Reforms in Spain: The Toledo Pact
In the case of Spain, the pension system has been undergoing reforms since 1995. The reform is known as the Toledo Pact and it has been followed by successive subsequent reforms, in 2005, 2006 and 2011. The negotiation of the Toledo Pact has failed as a result of the political deadlock (2015–2020) and the parliamentary insufficiency to implement it. Today, due to the instability in the Spanish Parliament and the strong discrepancies between unions and political parties, it is difficult, but not impossible, to renew the Toledo Pact. However, all the actors positively assess the Toledo Pact, from 1995 to today, because it entailed creating a long-term political commitment between the Right and the Left. This commitment is explained by the nine million pensioner voters conditioning the political vote: no political party can dispense with this huge electoral force. This seems to be a common problem in other European countries, pursuant to the ageing of the population. Another political achievement of the Toledo Pact has been the creation of a Parliamentary Board (which we interpret as strong institutionalisation) and the commitment to negotiate said pact every 5 years.
The chief goals of the Toledo Pact in 1995 and in its successive reforms can be summarised as follows (De la Fuente et al. 2018):
To raise employees’ contribution to the Social Security to access pensions. It has gone from 2 to 15 years in recent decades and now the calculation of the whole work life is being discussed, although it is difficult to come to an agreement on this point as a result of the contributory shortages of many workers.
The second achievement has been the fight against the underground economy and the persecution of fiscal fraud in order to improve the financing of retirement pensions, unemployment protection and Social Security.
The third objective was to delay the “de facto” retirement age. The legal age was 65 until the 2011 reform. However, the average de facto retirement age is 63.3, since many large companies use early retirement to restructure their staff. Part of the early retirement is covered by unemployment benefit and part is paid by the company until the employee reaches 65. From that age onwards the pension is covered by the Social Security. The last pension reforms in 2013 sought to extend the formal retirement age to 67.5. This goal will be reached gradually.
The current discussion of the reform of the Toledo Pact includes, with a narrow margin of consensus, the following objectives; (1) Extension of the legal retirement age: 65–67.5 (measure already passed by the government). The person must have contributed for 38.5 years to obtain 100% contributory pension. The progressive application would culminate in 2027; (2) Encourage delayed retirement (for every year delayed—65 years—the future pension increases by 2%); Increase the number of years in the calculation basis from 35 to 37 years for maximum pension for those born after 1957; the minimum number of years of contribution will be 15, to receive 50% of the pension; (3) The elimination of the Sustainability Factor (introduced in the 2011 reform) is being discussed, which entails an adjustment as the population ages, in such a way that 5% more life expectancy reduces the initial pension by 5% (this was to come into effect in 2019, but the socialist government froze this measure this year).
In 2011 the Assessment and Reform Report of the Toledo Pact, published by the Ministry of Employment, defended the need to reach a financial balance, as claimed by the European Union. To do so we must diversify sources of finance, increase the Reserve Fund, guarantee contributory pensions; prolong work life due to the ageing of the population and because of life expectancy; mobilise and guarantee the integration of women into the workforce; protect the most vulnerable groups: widow and orphan benefits; fight against fraud and the underground economy; strengthen the principle of “contribution”; promote complementary systems through tax allowances; legally channel migratory flows to avoid social dumping.
The fourth objective, achieved in the first Toledo Pact in 1995, was the funding of non-contributory pensions, through general state budgets. This affected a large number of housewives (Martín Artiles and Molina 2015).
Fifth, flexibility in the retirement age was another seemingly important achievement of the first pact. This consisted of the possibility of a person aged over 60 being able to partially retire with a part-time work day, and a younger person with a hand-over contract would take their place. But this measure has not been very successful. Lastly, another important achievement was creating a Reserve Fund for pensions, provided in 2005 with 23 billion Euros, which would act as a buffer in periods of crisis; effectively this is how it was used during the economic recession from 2008 onwards, and today it has been practically fully spent.
In February 2011 a tripartite agreement was made between the socialist government, the Confederation of Employers and Industries of Spain and the Comisiones Obreras and Unión General de Trabajadores trade unions. The Social and Economic Agreement is still in force. In it, the parties committed to economic growth, employment and the guarantee of pensions, as well as the progressive increase of the calculation base of the contributions from the last 15 to 25 years of work life, to obtain 100% of the pension.
Likewise, in November 2013, the Popular Party (PP) government unilaterally passed a basic reform that affects the revaluation of the pensions, up to then indexed in the Consumer Price Index (CPI), consisting of: (1) The revaluation index (from a minimum of 0.25% to a maximum of 0.5% of the CPI); (2) The Sustainability Factor, linked to demographic criteria, involves a reduction in the average pension as life expectancy increases. But with the change to a socialist government this Sustainability Factor has been frozen and the price index has been applied again in 2020.
Individual pension plans and occupational capitalisation pensions, both considered to be complementary pensions, have received a certain boost in recent years. This is precisely one of the goals of the European Union to diversify the sources of funding of the pensions. But these pensions have not had the success, or the importance they have in Anglo-Saxon countries. There is a considerable difference between Spain and the United Kingdom. The occupational pension systems have not been successful in Spain, France or Italy, despite it being a policy suggested by the European Union and its Multi-pillar Welfare State project. The Negotiated Occupational Welfare State does not fit well with countries with many small companies, due to the weakness of the representation of unions and employers, the weakness of the collective negotiation and the scarce participation of workers in production profits. For this reason, in Spain there are limited negotiated pension plans in large companies, while the centralised and generally effective collective negotiation system (erga omnes) covers all workers (80%) with the force of the law (Martín Artiles et al. 2016).
14.5.2 Trends in the United Kingdom
The majority of current debates about the pension system in the United Kingdom are conceived in the context of the growing concern for the ageing of the population and the financial sustainability of pensions, on the one hand, and the political responses which since the 1970s have been inspired by the neoliberal ideology that questions the cost of the ageing of the population and the role of the State in providing pensions, on the other (Foster 2017; Grady 2016; Naczyk 2018). The Office for National Statistics (ONS 2015) estimates that the population aged above 65 in Great Britain will grow twice as quickly as the population of working age, representing almost one quarter of the population by 2037, with the consequent changes in the proportion of contributors to the pension system compared to beneficiaries of the system. This represents a fundamental challenge for the future sustainability of pensions in the United Kingdom (Hofäcker 2015).
Pensions in the United Kingdom are a complex and mixed system. They can be classified into three groups: (1) state pensions, which can be the “basic state pension” and “second state pension” (S2P); (2) private occupational pensions, which can be “defined benefit pensions” and “defined contribution pensions”; and (3) individual/personal private pensions, which can be pensions of interested parties (stakeholders’ pensions), and self-invested personal pensions.
This section will focus on the first two pension groups due to their greater relative importance within the system. We will begin with state pensions. The modern basic state pension, known as the “Old Age Pension”, was introduced in Great Britain in 1909 under the Old-Age Pensions Act 1908 and it was aimed at preventing poverty in people’s old age. It was the first step towards establishing a Social Security system with unemployment benefit and healthcare, introduced through the National Insurance Act in 1911, which was established with the creation of the British Welfare State in the period following the Second World War. State pensions are financed through contributions to the National Insurance, related to income, and participation in the system is compulsory.
There is agreement that the most important change that took place in state pensions since the 2007–2008 financial downturn is the implementation of the new single tier state pension. From 2016 to 2017 onwards, the basic state pension and the second state pension were replaced by a new single tier state pension for all those people below retirement age. The Department for Work and Pensions of the United Kingdom introduced this change in a rather euphemistic manner: “The creation of the single tier pension will essentially reform the state pension system. It is designed in the light of a modern society, with a clearly defined function: to provide the bases to support people who are saving for their retirement” (DWP 2013: 27). In short, the proposed system eliminates the second state pension that had offered a top-up, related to income, on the basic state pension based on the nominal social security (Berry 2016). The main difference that exists between the previous versions of the system and the new proposed system is that it will not be essentially universal, with a greater possibility of authorising unpaid activities than was possible in the past.
However, from a more critical perspective, Berry (2016) rightly points out that by redefining the purpose of the state pension as a means for individuals to save for retirement, the reform is a subtle way of reducing social welfare via which the State withdraws from any attempt to provide a true income-replacing benefit for pensioners, instead of providing a context in which individuals can become self-sufficient and silently contribute more to the system. According to the opinion of some academics, this is another expression of the “financialisation” process of the social welfare benefit in the United Kingdom, which started in the 1970s and has intensified since the financial downturn and the implementation of austerity programmes (Berry 2016; Langley 2008). In the case of pensions, financialisation refers to the notion of policy according to which “individuals [not the State] must assume the personal responsibility of their own long-term financial security” (Berry 2016: 1). As we will see, financialisation is also a characteristic observed in the (private) occupational pension system and it is the rationality that explains the greatest change that has taken place in this system with the introduction of “automatic registration”.
In the United Kingdom, occupational pension plans are agreements established by employers of all sizes to provide pensions (and other benefits related with the workplace) to their employees. These were created by virtue of the Pension Schemes Act 1993, the Pensions Act 1995 and the Pensions Act 2008. Occupational pension plans are financed through a combination of contributions from employers and employees. Therefore, although employers and workers contribute, they are essentially capitalisation plans. Employers’ contributions generally represent a greater proportion of total labour costs than employees’ contributions. These pensions are financed through contributions of at least 8% of the employees’ gross salaries, with at least 4% paid by the employee, 3% by the employer and 1% by the State through a reimbursement in national security contributions. Due to the decentralised nature of collective negotiation in the United Kingdom, the large majority of occupational pension plans are offered at company level (Naczyk 2018: 85–86).
‘Occupational welfare’ has a longstanding history in the United Kingdom dating back to the nineteenth century with the establishment of charity associations that granted rights to benefits for illness, accidents and deaths, as well as old age and unemployment benefits, but which, nevertheless, excluded the lowest strata of the labour force (Harris 2004). Occupational pensions are prior to statutory pensions. Until the 1970s, occupational pension plans, which were quite ‘generous’ and were barely regulated by the state, essentially favoured qualified workers who employers, through their contributions to the system, wanted to retain; with “early leavers” (workers who were going to be dismissed) effectively subsidising the pensions of the end salary of permanent ‘white-collar’ workers (Naczyk 2018: 84).
Occupational pensions started to change dramatically with the establishment of individual/personal pensions in 1988 (the third pension group in the initial classification) by Margaret Thatcher’s government, following the enactment of the Social Security Act in 1986. According to Pierson (1994), these laws afforded workers the possibility of changing their occupational pension or second state pension and signing a new pension plan (actually a personal investment plan) with other private service providers, such as insurance companies, banks and building societies and unit trusts.
In 2015, there were more than 6000 professional regimes in the United Kingdom, of which 5000 were in deficit. The employers tended to offer their employees access to an occupational pension plan with defined benefits, generally based on the end salary, in other words, usually the employee was promised a pension of a fixed proportion of his/her salary calculated at the time of retirement. With the increase in the longevity of the population and the drop in interest rates, this scheme gradually became unsustainable, and many employers started to exclude new employees from the scheme of defined benefits as well as those who were offered pensions of defined contributions. Under this agreement, the employer (and sometimes the employee) makes regular payments to a private pension fund, and the fund is used to buy a pension when the employee retires (DWP 2010).
The most important change that has occurred with the occupational pension plans since the financial downturn is the introduction of the “self-registration” system in 2018. The Pensions Act of 2008 stipulates that, from 2018 onwards (depending on the size of the company), all employers will be entitled to automatically self-register their workers in occupational pension plans, thereby transferring more responsibility to employers to guarantee that their employees are registered in the business plan. Those workers who do not want to be registered will have to ‘opt out’ of their employer’s occupational pension plan, instead of ‘opting in’ as was the case in the past.
The gradual introduction of the new system sought to eliminate the inequalities in accessing the system, for example, between occupational categories, company size and sectors of activity. The chief inequality is the gap existing between public sector employees, among whom membership of the system reached 87% in 2014, and private sector employees, with only 49% the same year (Naczyk 2018; ONS 2015). In 2014 the average membership in the United Kingdom was 59%. The key question from the perspective of this chapter is that the new ‘self-registration’ system introduced to expand the occupational pensions, guarantees that the majority of people employed save into a ‘private’ pension plan, in addition to the state benefit to which the person is entitled (Berry 2016). This analysis is consistent with the hypothesis of the financialisation (Watson 2009) of the pension system presented above, in which individuals, not the State, assume greater responsibility for their own financial security; this can also be observed in other areas of British social policy.
14.5.3 Characteristics of the Reforms in Chile
In order to present the specific characteristics of the reforms and re-reforms of the social welfare systems in Argentina and Chile from 2008 to date, it is important to note that both countries were categorised as belonging to the group of pioneering countries with Uruguay and Costa Rica, since their welfare systems compared to other countries on the continent were established between the second and third decade of the twentieth century, between 1919 and 1930 (Mesa-Lago 2000).Footnote 6
Considering the historical evolution of the Chilean welfare system, Arenas de Mesa (2010) defines a first stage between 1924 and 1950 based on five pension funds which grouped together in the first three the majority of dependent workers, and in the two remaining funds, the Armed Forces and the police. For the 1950s, the pension system was characterised by the coexistence of a multiplicity of regimes (150) and by institutional atomisation (35 funds). In the second stage, starting in the 1970s, the system sought to converge with the standardisation guidelines formulated in the Beveridge Plan. For this decade, Chile had one of the most advanced systems: it covered all the contingencies, it presented high coverage and afforded generous benefits. However, to characterise the system of this period we use the metaphor of Mesa-Lago who referred to this as a bureaucratic labyrinth, legally complex and stratified, which was incubating considerable inequalities and suffered financial and actuarial imbalances.
The third stage refers to the reform leading to replacing the distribution system with a capitalisation system during Pinochet’s dictatorship in 1981 (Decree Law 3500 and 3501). In Chile the welfare reform replaced the distribution system of defined benefits with a compulsory individual capitalisation system, of defined contributions, paid for by the workers into a personal retirement account and managed by private anonymous associations: the Pension Fund Managing Companies (AFP).Footnote 7
One of the characteristics of this system is that not only is any idea of social solidarity—the fundamental principle governing distribution systems—lost, but, in the capitalisation system of individual accounts, the AFP become managers of the accumulated funds. Some authors highlight that the essential characteristic of this new system is that the contribution is only made by the worker, freeing the private company of any contribution. In 2002 a reform was introduced which allowed five pension fund options to invest through individual accounts; under this option the member could choose the type of investment and level of risk in which their funds could be used. The introduction of multi-funds meant pension managers became important actors in local and financial markets. According to Mesa-Lago (2009) the impact of the intervention of these AFP in the Chilean economy meant that 28 years would pass, in democracy, before establishing the reform of the welfare system in 2008.
In addition to the problems highlighted by the ILO, such as the lack of solidarity and coverage, gender inequality and the lack of representation of insured parties, countless diagnoses have reflected the increasing inequality that said pension system introduced into Chile; among those most mentioned there are not only the changes of parameters of the contributory conditions to retire, but the use of a life expectancy table differentiated according to sex is indicated, as well as the use of a complex calculation methodology which lays the foundations of unequal treatment for women (Yáñez 2010). In general, there is a serious coverage problem for those developing independent activities, leaving more than half of retired people in conditions of vulnerability and poverty.
The re-reform of the welfare system introduced during Bachelet’s government in 2008, can be summarised in the return of the role of the State as guarantor of a certain conception of universal rights and the creation of the Solidarity Pension System (SPS) which, via a new public institutionality, would implement measures to increase the welfare coverage of vulnerable groups such as youths, womenFootnote 8 and independent workers. Following the international indications during Bachelet’s government, a commission was created for the analysis of the welfare reforms representing wide social sectors seeking the legitimacy of same.
Although the reform persists in sustaining the individual capitalisation system of the former Pinochet regime, a series of changes are introduced which mean not only the reduction of costs, but also achieving better pensions for members, as well as strengthening the Voluntary Welfare Savings (APV). The conditions to access basic solidarity pensions (PBS) and the Solidarity Welfare Contribution (APS) include requirements such as being part of the 60% of the population with lower incomes and having spent a minimum period of 20 years in the country including four out of the past 5 years, and having turned 65 both for men and women.Footnote 9 The reform has led to a new institutionality that establishes the Pension Reserve Fund (FRP), with an initial contribution of 60.45 million dollars at the end of 2006.
Regarding said reform, some analysts highlight its benefits since for some it is an “integral system” that reconciles the contributory dimension with the non-contributory dimension and consolidates the role of the State, while gender and age inequalities are adjusted for young people (Arenas de Mesa 2010). For other analysts, the system follows an unbalanced logic because this new “solidarity” state pillar is too similar to social welfare and jeopardises the celebration of the re-reform (Birgin and Pautassi 2001). Or from a much more dissatisfied perspective, such as that of Soto Pimentekl (2015), the reform perpetuates a neoliberal retirement model that operates according to the principles of equivalence, focalisation and centrality of the market, with SCI and the capital market being the distribution mechanisms, through their free operation via their own rules.
In any case, some authors highlight the introduction of the non-contributory element of financing with fiscal resources, under the objective of guaranteeing the welfare protection of all those people excluded from the private contributory system (Yáñez 2010: 20).
14.5.4 The Welfare System in Argentina
The Argentinian welfare system evolved from the beginning of the twentieth century to 1946 through pension funds for each sector with a similar result to Chile in terms of its fragmentation, the unequal conditions of access, and sums of contributions and benefits (Panigo and Médici 2013). In the mid-1940s the system extended to all workers until 1969 when it was unified and began to be governed by the National Social Welfare System (SNPS).
In the mid-1980s, diagnoses weighted a range of factors referring to the financial sustainability problems of the SNPS; among these, analysts pointed out the drop in real salaries in inflationary conditions and the subsequent increase in unemployment after the collapse of the occupation structure towards informality; with a growing expansion in the services sector and in self-employment; the growing degree of informality added to the old problem collection bodies had to oversee the activities of self-employed people or independent professionals (Lo Vuolo 2008). The diagnoses also weighted the weight of the aging of the population, the direct impact of which affected the support rate (active/passive relation) and the exhaustion of the welfare surplus, considering its use for financing state functions other than social welfare. All of these variables made it impossible to meet the legal defined benefit parameter of the pension credit equivalent to 82% of the salary of a worker in activity in a similar position (Bonari et al. 2009).
In a context of complicated legislative and union negotiations, in 1994 two changes occurred. One was an important change regarding the age parameters to access the pension and another one regarding the necessary years of contribution. The retirement age increased from 55 to 60 for women and from 60 to 65 for men. Furthermore, the requirement to contribute more years to the system increased from 20 to 30 years of contribution. In addition, Law 24.241 introduced the option to retire in one of the two pension systems, distribution or capitalisation. On the one hand, a tripartite public distribution system, managed by ANSeS (National Social Security Administration) and, on the other hand, an individual capitalisation regime, managed by Retirement and Pension Fund companies, known as AFJP. The coexistence of both systems, distribution and capitalisation, led to a mixed social welfare system.
In this way, the State guaranteed a minimum contributory pension perceived as the Universal Basic Benefit (PBU) via which similar defined benefits were granted to all insured parties, according to age and years of contribution. Furthermore, via private capitalisation, an additional pension was paid. Both contributory options operated in addition to a non-contributory pension system. But the mixed system imploded with the severe financial downturn in 2001, and despite adjustments and partial modification since 2003, the system was reformed again in 2008.
Following the severe socio-political and economic crisis in 2001, a social redistribution was promoted, implementing non-contributory social protection policies. The aim was to universalise pensions for elderly adults who have not contributed the sufficient number of years to the distribution system. In this regard, it is important to note the way in which the idea of work informality has no longer been problematized as a voluntary choice of workers but as a problem in the application of macroeconomic policies. That is why it is considered a reparatory measure, as it compares formal workers with informal workers (Hopp and Lijterman 2019).
The welfare re-reform of 2008 (Law 26.425) entailed the end of the mixed system implemented in 1992, withdrawing the private capitalisation system, and returning to the state distribution system. From January 2009, all members were transferred to the public distribution system SIPA (Argentinian Integrated Welfare System) managed by ANSeS with the transfer of funds from individual AFJP accounts to the Sustainability Guarantee Fund. Known as the Welfare Inclusion Plan or Programme, the strategy to extend the welfare coverage through early retirement programmes or moratoria helped to rectify and increase the number of beneficiaries. The Welfare Moratorium granted a pension to all adults of retirement age in December 2004, who did not have the required 30 years of contribution, through the implementation of a monthly discount of the missing contributions. A second strategy, complementary to the previous one, was the offering of early retirement which enabled those who were less than 5 years from retirement or were unemployed (but had contributed to the system, although the years of contribution were not complete), to receive 50% of the pension.
14.5.5 Comparative Summary
Summarising the compared models, we observe that:
The first substantial difference between Europe and Latin America lies in the degree of institutionalisation of the pension systems. In Europe, the institutionalisation is strong, it is linked to rights and duties, to citizens’ rights and with the contributory control of employment in social security, there are fiscal sanction regimes. In America, on the contrary, the high volume of informal employment undermines the social protection institutions (Table 14.5).
Contributory pensions in Spain are the main protection system for pensioners, but they have financial sustainability problems because new jobs have low salaries and because of the high number of temporary contracts. There are also political difficulties to renew the Toledo Pact agreements. One of the chief problems lies in the low salaries in new jobs—created during the European recession and afterwards—for young people. One of the paradoxes is that the average pension paid is above the average salary of the new jobs, which is a serious problem for the future. For example, in 2017 the average gross salary was lower (1271.88 Euros) than the new average retirement pension (1318.47 Euros), which threatens the sustainability of the pension system: a true intergenerational solidarity crisis.Footnote 10 This is a similar problem in Argentina. Currently, new salaries are lower than retirement pensions. In other words, new salaries are not sufficient to support the fiscal pressure entailed by pensions, which threatens to render the pension system unsustainable or to seek new financing options, such as the idea of the Multi-pillar State. However, these changes arise again in the Argentinian debate, especially with the commitments made due to debt with the IMF which advises labour, fiscal and pension reforms.
The net replacement rateFootnote 11 of public and private pensions is one of the reforms that threatens the purchasing power of pensioners. The replacement rate according to the contributions paid to public and private regimes is proportionally high in Argentina (83.7%) and in Spain (72.3%), that is, in the regimes where the Bismarckian contributory-proportional system dominates. On the contrary, it is very low in the United Kingdom (43.5%) and in Chile (36.2%), where private capitalisation pensions dominate.
The retirement age is being extended in Spain; with the last reform it began a progressive increase from 65 years to 67.5 in 2027. In the United Kingdom it has gone from 65 to 68 to be reached in 2034. In Argentina it has not changed since 1994. In Chile the retirement age is 65. This may be an important matter in the years to come as a result of the increase in life expectancy and the fostering of “active aging” policies.
Another problem is the gender inequality among pensions, which can be explained by the composition effect of the job and the discontinuous trajectories in women’s careers, a problem shared in all the countries. In the same way, gender inequalities related to pensions are debated in both continents.
Occupational capitalisation pensions are important in those countries with a neoliberal political tradition, such as the United Kingdom and Chile, typical models of the financialisation ideology. In these two countries the occupational and private pension funds have financial sustainability problems, both due to their fragmentation and due to the low yield of the capitalisation funds in a long context of low types of financial interest. In the case of Chile, there is a social movement to return to the public pension funds guaranteed by the State. In the case of Spain, occupational pensions have not been successful, despite being included in the Toledo Pact in 1995 and in the consecutive years. The financial downturn has halted its growth since 2007, due to the reduction in profitability of the financial capital. Therefore, there is no convergence between Spain and the United Kingdom. The well-known convergence in some fora is only rhetorical as a political discourse (OECD 2020). The reality is that in Spain the State covers the deficits through special taxes. Moreover, the trend towards capitalisation systems encounters an obstacle in the growth of informal employment in the countries in Latin America. As was discussed in Chap. 2, the informal sector has been growing considerably for decades, partly due to work flexibilisation, typical of the neoliberal policies applied in the region.
Individual private pensions are equally important in liberal countries such as the United Kingdom and Chile, ideal type models of financialisation capitalism; this is not the case in Spain and Argentina.
Negotiated Welfare, according to Trampusch (2007) is only important in the United Kingdom and somewhat in Chile. This model is inspired by the principle of the individual right of the insured party, rather than on the ownership of the social rights of citizens. In Spain, the inclusion of pensions in the collective negotiation is only registered in large companies; occasionally, pension plans are registered for small socially insured companies. But an important difference compared to other countries is the social agreement (pick level) reached with the Toledo Pact. The Toledo Pact has a profound political meaning in terms of legitimisation of the Bismarckian contributory-proportional model, based on inter-classist vertical solidarity. In addition, the social pact props up social order, demonstrating the importance of unions.
Lastly, informal employment presents an access problem for workers to their future pensions. In the United Kingdom informal employment is not of great importance. In Spain it is relatively moderate and the solution is the providing of a minimum pension. The majority of those who receive it are women. In Chile and Argentina informal employment is a serious barrier that hinders access to capitalisation pensions. A response to the problem of informality, of precariousness in employment and of the working poor is the growth of neo-welfarism. Neo-welfarism appears to be a generalised trend in the four countries to help severe poverty, which is often in addition to voluntary assistance, religious institutions and NGOs; hence the growth of the third sector.