Mich : Automatic Adjustment Mechanisms in Pension Reforms: how to implement them?

Kevin Hartmann (UCLouvain)
In the last 20 years, pension reforms have included the implementation of mechanisms that externalize the decision of altering the parameters of a pension system from the political decision. These are the Automatic Adjustment Mechanisms (AAM). An AAM is “a rule that automatically regulates the value of one or more parameters of the system according to the level of some variable indicator that is crucial for the sustainability or solvency of the pension system” (Meneu et al. 2016:89). It means, that its main goal is to financially balance a pension system to ensure its sustainability by automatizing a decision that has been done discretionally overtime. Assuming that they are effective in achieving its main goal and that it is desirable to externalize such decisions from the political decision-making sphere, then the question that arises is: through which legal procedures should AAM’s be adopted to ensure a correct degree between enforceability, legitimacy and resilience?