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Household savings and shocks to occupational pension funds

Published online by Cambridge University Press:  31 March 2025

Francesco Caloia ,
Mauro Mastrogiacomo  and
Irene Simonetti Open the ORCID record for Irene Simonetti [Opens in a new window]
Francesco Caloia
Affiliation:
De Nederlandsche Bank, Amsterdam, The Netherlands Department of Economics, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands Network for Studies on Pensions, Aging and Retirement (NETSPAR), Tilburg, The Netherlands
Mauro Mastrogiacomo
Affiliation:
De Nederlandsche Bank, Amsterdam, The Netherlands Department of Economics, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands Network for Studies on Pensions, Aging and Retirement (NETSPAR), Tilburg, The Netherlands
Irene Simonetti*
Affiliation:
Department of Economics, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands Network for Studies on Pensions, Aging and Retirement (NETSPAR), Tilburg, The Netherlands Amsterdam School of Economics, Research Centre for Longevity Risk (RCLR), University of Amsterdam, Amsterdam, The Netherlands
*
Corresponding author: Irene Simonetti; Email: [email protected]
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Abstract

Using household survey data linked to supervisory data of Dutch pension funds, we provide evidence of the increase in household savings caused by shocks to the financial position of pension funds. Our identification strategy exploits cross-sectional and time variations in pension funds’ funding ratios, which result from asset allocations and price corrections outside the control of fund members. The findings reveal that fluctuations in funding ratios significantly impact household savings, with a displacement effect above 40 percent. Lower funding ratios are associated with higher voluntary savings, driven primarily by members of pension funds with lower historical returns. Unlike earlier studies, this paper covers a long time span including three major economic crises, providing novel insights into the interaction between pension fund stability and individual saving behaviour.

Keywords

funded pensionsfunding ratioshousehold savingsoccupational pensionsD14G51H55
Type
Article
Information
Journal of Pension Economics & Finance , First View , pp. 1 - 22
Copyright
© The Author(s), 2025. Published by Cambridge University Press.

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