Easter may make some think of the Roman Empire because of its role in the Easter narrative. But this is a pensions blog! And it’s Easter – so let’s make a connection there.
While Pontius Pilate is primarily known for his part in the crucifixion story, he was also a cog in the administrative machine that pioneered several public institutions we have today, including pensions. Though Pilate didn’t have any direct responsibility for pension administration, colleagues that lunched with him in the civil service canteen may have…
The Roman Empire was among the first to introduce a work-based retirement promise. Roman soldiers were promised a praemia on retirement: a grant of land or a lump sum. This pension was intended to maintain loyalty and deter rebellion, and was an early example of pensions being used as a lever; not just to provide income in later life, but as a mechanism for control and cohesion. Fast forward two millennia and modern governments continue to use pensions as policy levers to manage people, work and the economy:
- Retirement ages and eligibility criteria are levers for managing labour market patterns and public finances.
- Auto-enrolment is designed to shift responsibility for retirement support from the state to individuals, employers and the private sector.
- Tax relief aims to ensure retirement income is used to support retirement and to prevent people from falling back on means-tested benefits.
Like the Romans, today’s governments walk tightropes of cost, fairness, and political acceptability.
Unfortunately, Roman pensions were not sufficiently funded and as the Empire aged, costs increased. The state couldn’t always meet its obligations. Sometimes land grants had to be substituted with cash or IOUs. Unlike our current pensions, the Roman military pension was non-contributory, so that was not a lever that could be used to manipulate expenditure. Alongside problems paying pensions, the overall burden of military and administrative spending contributed to the Empire’s decline, though there is disagreement about the size of the role that unfunded pensions played in this.
I think we are better set up than the Romans, fortunately. Though in their defence, they didn’t have a history of pensions to learn from! The Romans were pioneers, and we can thank their creative spirit when we take our monthly income in retirement (which I sincerely hope is an adequate one). There was less of a focus on adequacy for Romans, judging by this quote:
So, what lessons should we reflect on while eating our chocolate eggs and getting up late on this four-day weekend? I think we are in a much better position than the Romans – we have a near Universal State Pension, and levers aiming to maintain sustainability, e.g., State Pension age rises, and a focus on longer working. A decline in pension provision, as seen in the Roman Empire, was part of the fall of a civilisation, something we are hopefully quite far away from. However, I think the Roman story underscores how essential taking care of the poor and vulnerable is to a functioning society – and that such care should be one of the last things to go…
Happy Easter!
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