Pension Reform in the Netherlands

CentER Discussion Paper No. 2020-012

18 Pages Posted: 24 Apr 2020

See all articles by Ed Westerhout

Ed Westerhout

CPB Netherlands Bureau of Economic Policy Analysis; Tilburg University - Tilburg University School of Economics and Management

Date Written: March 31, 2020

Abstract

During the last decade, the Dutch have debated intensively reforming their second-pillar pension scheme. Meanwhile, ten years turned out to be a too short period for pension funds to bring their funding ratios to sound levels, due to among others the worldwide decline of interest rates. Currently, the Dutch government and the social partners have come up with a quite concrete reform plan. The plan includes three main points: i) make the move towards actuarially fair pension accruals, ii) strengthen the link between benefit levels and capital market rates of return and iii) introduce the option to take up part of accrued pension wealth at retirement. This paper reviews and interprets the plan for pension reform.

Keywords: Pension Reform; Uniformity Pricing; Funding Ratio; Interest Rate; Indexation

JEL Classification: H55; G29

Suggested Citation

Westerhout, Ed, Pension Reform in the Netherlands (March 31, 2020). CentER Discussion Paper No. 2020-012, Available at SSRN: https://ssrn.com/abstract=3565091 or http://dx.doi.org/10.2139/ssrn.3565091

Ed Westerhout (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

Tilburg University - Tilburg University School of Economics and Management ( email )

PO Box 90153
Tilburg, 5000 LE Ti
Netherlands

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