Reforming Dutch Occupational Pension Schemes

17 Pages Posted: 1 Jul 2014

See all articles by A. Lans Bovenberg

A. Lans Bovenberg

Tilburg University - Center for Economic Research (CentER); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Raymond Gradus

School of Business and Economics

Date Written: May 28, 2014

Abstract

Dutch occupational defined-benefit plans suffer from a number of serious weaknesses, including ambiguous ownership of the surplus, back-loading of benefits, and lack of tailor-made risk management. To address these weaknesses, we propose collective individual defined-contribution plans that are actuarially fair. These schemes maintain important strengths of collective schemes, such as mandatory saving, collective procurement and pooling biometric risks. At the same time, they eliminate intergenerational conflicts about risk management and distribution through transparent individual property rights and tailor-made risk profiles. We show how the transitional burden due to the phasing out the back-loading of pension benefits can be addressed without a substantial increase in contributions.

Suggested Citation

Bovenberg, A. Lans and Gradus, Raymond, Reforming Dutch Occupational Pension Schemes (May 28, 2014). Netspar Discussion Paper No. 05/2014-017, Available at SSRN: https://ssrn.com/abstract=2460667 or http://dx.doi.org/10.2139/ssrn.2460667

A. Lans Bovenberg

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2912 (Phone)
+31 13 466 3066 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Raymond Gradus (Contact Author)

School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

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