It is customary to credit the Prussian Chancellor Otto von Bismark with the birth of Social Security, when in 1881 he regulated the obligation of companies to contribute to funds that would finance the pensions of their workers from the age of 65. But in Prussia, in the time of von Bismark, a pension plan for the military had already existed since the end of the 18th century. The historical sequence of the emergence of social security, first pensions for the military, then for civil servants and finally for workers, is common in most European countries. In Spain, Charles III founded military pensions in 1761, and in 1919 the Workers’ Retreat was created for employed workers. The different origin of these social protection systems explains the differences that exist between the social security of the military (ISFAS), public officials (MUFACE) and employed workers.
The first known pension plan for military veterans in Europe was established by Emperor Augustus (figure 1) who ruled between 27 BC and 14 AD. In his political testament, called “Res Gestae,” Augustus claims to have retired 300,000 veterans.
Figure 1 Emperor Augustus
Source: https://commons.wikimedia.org/wiki/File:Augustus_of_Prima_Porta_(inv._2290).jpg
1. Background: Land for Veterans
The great Roman generals who preceded Augustus, Marius, Pompey or Caesar, prepared aid for veterans in their retirement by granting public lands. The veteran could start a second life as a farmer or land lessor and thus have a pension. Caesar, after winning the wars in Gaul, gave his veterans lands in the Gallic cities, thus settling them and, in the process, Romanizing the territory. An issue of the comic Asterix titled “Caesar’s Gift” describes this system. Caesar gives land to several veterans, but to one who was rather lazy, he gives him a poisoned gift, since he gives him the Celtic village of Asterix. Obviously the veteran will not be able to take charge of the gift, due to the opposition of the Celts.
In Hispania, Augustus distributed land to his veterans of the Cantabrian wars. With these veterans, the city of Mérida was built, called in Latin Emerita Augusta, that is, the city of the retirees (emeritus) of Augustus. The city of León was also born from the lands that the veterans received in the vicinity of the Legion barracks (hence León). In Barcino the existence of veterans is also known, and some are dedicated to the business of producing Maresme wine.
2. Augusto’s pension plan
Augustus established that military life would be 20 years. A citizen enlisted in the legions around the age of 20, and was militarized until the age of 40, although later he could re-enlist as a veteran. To those who preferred to return to civilian life, Augustus offered a single pension equivalent to the salary of a legionary of about 12 years. This amount of money allowed the veteran to buy land in his own homeland or wherever he wanted, or to maintain a normal life in the remaining years of his life. Life expectancy in those years, for this age, was about 10-12 years.
3. Certificate of working life
Upon graduation, the veteran received a certificate of working life, in Latin “honesta misio.” Most of the certificates were made of perishable materials that have not reached us, but there are some that were written on metal, for example the one in figure 2. This certificate shows the battles in which the veteran had participated, the honors and medals he had received. has received and the comments from his bosses. This certificate entitled the veteran to the pension.
figure 2 honest mission (certificate of the legionnaire’s working life)
Source: https://commons.wikimedia.org/wiki/File:Roman_military_diploma_Carnuntum_00.jpg
4. Treasury
To manage the pension system, Augustus developed a treasury called “Aerarium militare”. aerary It means precisely treasury in Latin. The treasury was dedicated specifically to the military pension system and was separate from the other public finances that were managed in the “Aerarium saturni”.
To manage the military aerary Management experience was required and for this Augustus entrusted its management to three senators with prefectural level.
5. Financing
To finance the military aerary, Augustus made an initial contribution of 170 million sesterces*, as stated in the “Res gestae”. In addition, they initiated two new taxes to feed the military aerary, one about inheritances and another about auction sales. The inheritance tax started at 5% of the value of the inheritance, which in Latin is called “Vicésima heredititaria”. The tax on auction sales started at 1% of the auction value, in Latin “Centésima rerum venalium”. Sales by public auction were frequent in Rome, since the public administration had to, for the sake of transparency, purchase public supplies through auctions. The revenue from these taxes financed pensions.
Augustus’s pension system was in place for several centuries.
6. Discussion
It is interesting to observe how in the first pension plan for which there is information a series of basic elements of modern public pension plans appear, and where I would highlight four: (i) Certificate of working life, (ii) Specific treasury, (iii) ) ) Financing, and (iv) Quantification of the pension.
(i) Certificate of working life: This is a summary of the legionnaire’s work activities with the evaluations of his bosses. If these evaluations were not positive, for example, due to cowardice or betrayal, the legionnaire did not receive the pension. In the event that the legionnaire suffered an injury that prevented him from continuing to work, there was provision for a disabled person’s pension.
(ii) Specific treasury: The process is much more transparent with a treasury dedicated specifically to this issue and veterans’ money was prevented from being used for other public expenses. This has not always been the case, since, for example, the Social Institute of the Armed Forces (ISFAS) was created in 1978.
(iii) Financing: The financing of this pension plan is through final taxes. This is a completely different model from quota financing, but is instead consistent with financing social benefits for civil servants, which is financed with the public budget and not with quotas. Taxes are very “modern”: inheritances and sales. Augusto had acceptance problems when introducing them.
(iv) Quantification of the pension: The pension is an amount proportional to the salary, so the centurions, with a higher salary than the legionaries, also had a higher pension. The pension was paid at once, which was easier to manage than a lifetime pension, and its import was known. The capitalization of the pension has been done on some occasions, especially for unemployment pensions. This allows the beneficiary to invest the amount in some asset to achieve a periodic income, for example, agricultural land that is rented. Or it allows you to organize a modus vivendifor example, exploiting agricultural land or establishing a craft workshop.
In this post, only the pension plan has been analyzed, but the legions had very careful medical care, with a doctor for each century and military hospitals.
*To put this figure in context, The annual public budget of the Roman Empire at that time is estimated at 700-800 million sesterces. of which the greater part was to pay the army, and a GDP of the Empire around 16.7 billion sesterces annually.
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