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New Dutch pension contracts and lessons for other countries

Published online by Cambridge University Press:  21 May 2018

LANS BOVENBERG
Affiliation:
Tilburg University and Netspar(e-mail: [email protected])
THEO NIJMAN
Affiliation:
Tilburg University and Netspar(e-mail: [email protected])

Abstract

This paper summarizes recent developments in Dutch occupational pensions of both the defined contribution and defined benefit (DB) types. A reform of DB schemes is discussed that introduces financial assets as individual entitlements. At the same time, the reformed schemes derive (dis)saving, financial risk management and insurance decisions from the explicit objective of adequate and stable lifelong retirement income. The proposed system also involves an insurance contract pooling longevity risks and possibly collective buffers that share systematic risks with future pension savers. The paper identifies the strengths and weaknesses of the Dutch contract design and draws lessons for other countries.

Type
Article
Copyright
Copyright © Cambridge University Press 2018 

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Footnotes

We thank Dirk Broeders, Kees Goudswaard, Marike Knoef, Ralph Koijen, Michael Preisel, and Bas Werker for helpful comments on an earlier draft.

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