Interpretación de los resultados de la encuesta

Companies have historically been interested in the developments of the privatisation of pension provision (therefore, the retrenchment of the state provision) and the social policy expansion, as it provided them the opportunity to use the provision of workplace pensions as a competitive edge, that supports their public image and hence competitiveness as an employer of choice (Gordon, 1991; Mares, 2003; Swenson, 2002). In the US, for example, wage bargaining was left at the company level since the Wagner Act in 1935, which stimulated a split between low-skilled cost-focused operating firms that were unlikely to provide pension offerings, and high-skilled firms that used workplace pension to attract talent (Swenson, 2002). In other countries, such as Sweden, while employers were not opposed to the expansion of social policy, the associated cost burden of privatised old-age income, has led employers to push for a more social democratic initiative of publically financed pensions (Swenson, 2002). The employer involvement in providing old-age provision, has also enabled employers to ensure the loyalty of workers, reducing strikes and other labour acitivism – especially when unions were involved (Esping-Andersen, 1996; Sass, 1997); while at the same time providing them the flexibility to encourage wage moderation and to cut down on the pension offering (or combine it with other benefits or reward components) if needed (Mares, 2003; Mares & Carnes, 2009). Trade union influence and the relative importance/expansion of workplace pensions have varied among countries. In Britain, for example, there has been little evidence that unions played an important role, as they have traditionally been skeptical about occupational welfare (Bridgen & Meyer, 2005). Yet, there has been some evidence that trade union involvement has ensured the continuation of certain DB schemes – which has been a more costly and risky form of providing pension provision to employees, which employers have tried to minimise as further described below (Terry & White, 1995).

The conventional view of most pension professionals and scholars (especially from the discipline of accounting, finanance and to some extent economics) is that workplace pension schemes are deferred pay, which typically enjoy government support in the form of tax breaks (Blacker, 1980; Tepper, 1981)8_{. Workplace pensions are especially}

8_{One of the earlier critics of this perspective, however – Lazear (1983), has warned that pensions}

should not only be seen as tax-deferred savings account, as they also provide several human capital aspects which are further discussed in this section.

an important element in corporate financing and have been argued to be a device (particularly for senior management) for avoiding or deferring tax payments. From an employer perspective – the tax incentives stimulate employers’ willingness to provide and finance pension arrangements (Hannah, 1986; Sinfield, 2000). Simultaneously, where tax incentives have either been reduced or government regulations have in- creased the costs for employers, the provision of workplace pensions has reduced. For example, augmented governmental policies in the 1980s impacted the reduction of pension offerings by companies in the US (Sass, 1997). Also, more recent tax reforms in Mexico, which reduced the tax breaks for employee benefits (including pensions) reduced the overall willingness by employers to provide workplace pensions – or stopped initiated processes to implement pension schemes9_{. More broadly, the} requirement to disclose pension fund liabilities under the IFRS regulations, which were a consequence of the mis-selling scandals and the Maxwell case in the early 1990s – also incentivised companies to manage their global risks and costs related to pensions (as previously stated in this thesis) (Rogowski, Salais, & Whiteside, 2013). As part of these cost and risk mitigation efforts, companies around the world typically trans- formed their pension arrangements to less risky vehicles; therefore to switch pension arrangements from costly and high-risk DB plans to easily manageable DC arrange- ments – which is further discussed in the following section (Coates, 2001; Roberts, 2004). Literature that only refers to the tax inventives or financial measurements of pensions has overlooked, however, the labour-oriented components of pensions and deferred benefits. These benefits, for example, incentivise employees to work harder and also increase employees’ willingness to remain in employment with the same com- pany (Lazear, 1983). Workplace pensions are therefore also an important incentive device in labour relations, affecting employee turnover (Lazear & Moore, 1988; Wolf & Levy, 1984), work effort, and the timing of retirement (Lee, Hsu, & Lien, 2006; Lepak & Snell, 2002). Stock and Wise (1988), for example, have found that work- place pension provision have had a more significant impact on employee retirement decisions than the underlying social security system. The ability to manage human capital (for example by attracting and retaining employees and to be able to manage early retirement) has been seen as the key incentive for employers to offer and pay

9_{More information on the tax reform and its implications on employers’ willingness to provide}

for workplace pension arrangements (Mares, 2001; Rogowski, Salais, & Whiteside, 2013; Sass, 1997). Pension benefits have also enabled employers to dismiss older and less productive workers, being able to provide an incentive mechanism for employees to opt for early-retirement (Ebbinghaus, 2006; Lazear, 1983)10_{. More recent litera-} ture, however, has relativised the importance of pension provision in terms of human capital management. Employees – and especially those that are highly-skilled – are expecting more individualsed benefits (G. L. Clark, 2003; Ross & Wills, 2002). Also, according to Sass (1997), companies focus less on employee retention as different skill-sets are needed and the labour market has become more fluid. Sass, however, focuses mostly on developed markets – and specifically the US – pension provision and the role in terms of human capital management in emerging markets has not been further discussed.

Some research – notably by Mares (2001), has found that the size of an organisa- tion influences the likelihood that workplace pensions are offered. Particularly large organisations, with highly-skilled labour and the need for retention, are likely to offer pension schemes to their employees. Smaller organisations may be disincentivised to carry the cost and managerial/administrative burden when offering pension benefits. The next section introduces the three most common types of pension arrangements companies provide. It outlines each scheme’s advantages and challenges for employers and employees respectively, and indicates some consequential trends.