Retiring in Roman times

The word pension: The word pension comes from the Latin pensio. It means payment or repayment and is derived from the verb pendere, which means to weigh or to pay.

The Roman pension system originated in the 1st century BCE. It was set up specifically for the military. In prior centuries, the Roman army was made up of civilians who were mobilised for military campaigns. After the war season, these civilian soldiers returned to their own farms. In fact, land ownership was a prerequisite for serving in the army. The farm provided a livelihood for these civilian soldiers. A pension was therefore not necessary. As the Roman armies operated further and further from home, this system came under pressure. Civilian soldiers were away from home too long to maintain their farms and work the land. As a result, the ailing farms were bought up by wealthy people, who actually saw their fortunes grow due to Roman military successes. This led to social unrest and necessitated a change.

Denarius struck in Rome, 81 BCE: Ceres, the goddess of arable farming and grain, is depicted on the obverse. On the reverse, a farmer works a field with a plough and a pair of oxen. Ploughs are a common symbol on Roman coins. They usually refer to the foundation and development of coloniae, new settlements for Roman veterans.

The Romans decided to reform the army. Land ownership was no longer a prerequisite for serving in the army, and soldiers were paid for their services. But this created a new problem: there was no pension provision for soldiers once they had completed their service. Veterans were in danger of falling into poverty. To prevent this, some generals, such as Julius Caesar (100 - 44 BCE), gave their retired soldiers plots of land in coloniae, new settlements that were built especially for veterans. This forerunner of the pension system allowed soldiers to earn a living as farmers after completing their military service.

But the system was not foolproof. Popular and ambitious generals abused it to seize power for themselves. There was no legal basis for a fair distribution of land and therefore no guaranteed old-age pension. In an era without trade unions or human rights, soldiers had little choice but to resort to mutiny or even armed rebellion when prospects were uncertain. This unrest and the power struggles between jealous generals led to escalating hostilities. It was one of the triggers for the Roman civil wars of the 1st century BCE. Romans turned on each other, and the prospect of old age became increasingly grim for would-be military pensioners.

Denarius struck in Rome, c. 40 BCE: The reverse shows how the Roman army was linked to agriculture and the distribution of land to veterans. Left: a military banner and a legionary standard with an eagle. On the right: a plough and a surveyor. These two symbols refer to the foundation of coloniae, settlements where veterans were given a piece of land. The obverse shows the portrait of Julius Caesar (already deceased). The coin may therefore be linked to the distribution of land to Caesar's veterans.

Emperor Augustus (63 BCE - 14 CE) was the sole ruler of the empire after the civil wars. He reformed the army, disbanded several legions and decided to reward veterans with a praemia, a retirement bonus, out of his own pocket. An important lesson from the civil wars was that good financial prospects were essential for stability. A pension rather than a piece of land seemed to pay off,  so in 6 CE Augustus decided to set up an official pension fund: the aerarium militare. The emperor stipulated that an average legionnaire was entitled to a pension of 12,000 sesterces - the equivalent of 12 or 14 years' wages. But with an active army of a quarter of a million men and an estimated 15,000 retiring each year, where was all that money going to come from?

Dupondius struck in Nemausus, c. 10-14 CE: The reverse shows COL NEM, which stands for: Colonia Nemausus (now Nîmes, France). Augustus made Nemausus a colonia and distributed the land to his veterans who had served in the conquest of Egypt. This is what the crocodile chained to a palm tree refers to. The obverse shows the portraits of Augustus (right) and his general Agrippa (left).

The aerarium militare pension fund was part of the aerarium. The word is made up of aes (money) and -ārium (place for). The aerarium was in a sacred place even before the time of Augustus: it was located in the Temple of Saturn on the Forum Romanum. This says a lot about its value to the Romans. Money and important objects were kept in the aerarium: decisions of the Senate, laws and the legionary standards, which were sacred to the Romans. Saturn was the Roman god of agriculture, time and wealth. So this divine protector guarded both agriculture and the treasury: important things for Roman pensioners.

Denarius struck in Rome, 49 BCE: The obverse of this coin features the head of the god Saturn. The god of agriculture carries a sickle on his shoulder. The reverse shows the eagle and two standards bearing the letters H and P, which refer to hastati and principes: the junior and senior units in Roman armies. The obverse reads Gnaeus Nerius. As a quastor urbanus (an elected public office) he was responsible for the legionary standards and the treasury in the aerarium.

Augustus is said to have financed the pension fund with 170 million sesterces of his own money. It is not known whether he made several payments or all at once. Either way, it was an astronomical sum. But it was not enough. So Augustus came up with a 5% inheritance tax to finance the military pension fund. This hated tax, coming as it did in a time of famine and fires, caused great unrest in Rome. Other sources of income for the pension fund were donations, taxes from public auctions and probably war booty. During Augustus' reign, this seems to have been sufficient. But when he died in 14 CE, the fund was empty. Soldiers then had to stay in service until there was enough money for a pension. This soon led to unrest and even mutiny – exactly what the pension fund was supposed to prevent.

In the foreground, the temple of Saturn. It has been destroyed and rebuilt several times. Today, the building can still be admired in the Forum Romanum.