Developments in pension reform

The case of Dutch stand-alone collective pension schemes

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Corporate defined-benefit plans suffer from a number of serious weaknesses, including credit risk of the sponsor, ambiguous ownership of the surplus and back-loading of benefits. Also defined-contribution plans feature drawbacks. Individuals are not well equipped to make the complex financial decisions involved, transaction costs are substantial and various risks are not managed properly over the life cycle. Stand-alone collective pension schemes offer an attractive third way between corporate defined-benefit schemes and individual defined-contribution schemes. The members of the fund are the risk bearers and the funds manage risk aimed at providing an adequate income level during retirement at low costs. Dutch pension funds are evolving into such stand-alone pension schemes. Some directions for future reforms are sketched.
Original languageEnglish
Pages (from-to)443-467
JournalInternational Tax and Public Finance
Volume16
Issue number4
Publication statusPublished - 2009

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Pension scheme
Pension reform
Defined benefit
Surplus
Ownership
Transaction costs
Defined contribution
Third way
Sponsor
Pension funds
Retirement
Life cycle
Income level
Financial decisions
Defined contribution plan
Costs
Credit risk

Cite this

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title = "Developments in pension reform: The case of Dutch stand-alone collective pension schemes",
abstract = "Corporate defined-benefit plans suffer from a number of serious weaknesses, including credit risk of the sponsor, ambiguous ownership of the surplus and back-loading of benefits. Also defined-contribution plans feature drawbacks. Individuals are not well equipped to make the complex financial decisions involved, transaction costs are substantial and various risks are not managed properly over the life cycle. Stand-alone collective pension schemes offer an attractive third way between corporate defined-benefit schemes and individual defined-contribution schemes. The members of the fund are the risk bearers and the funds manage risk aimed at providing an adequate income level during retirement at low costs. Dutch pension funds are evolving into such stand-alone pension schemes. Some directions for future reforms are sketched.",
author = "A.L. Bovenberg and T.E. Nijman",
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language = "English",
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journal = "International Tax and Public Finance",
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Developments in pension reform : The case of Dutch stand-alone collective pension schemes. / Bovenberg, A.L.; Nijman, T.E.

In: International Tax and Public Finance, Vol. 16, No. 4, 2009, p. 443-467.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Developments in pension reform

T2 - The case of Dutch stand-alone collective pension schemes

AU - Bovenberg, A.L.

AU - Nijman, T.E.

PY - 2009

Y1 - 2009

N2 - Corporate defined-benefit plans suffer from a number of serious weaknesses, including credit risk of the sponsor, ambiguous ownership of the surplus and back-loading of benefits. Also defined-contribution plans feature drawbacks. Individuals are not well equipped to make the complex financial decisions involved, transaction costs are substantial and various risks are not managed properly over the life cycle. Stand-alone collective pension schemes offer an attractive third way between corporate defined-benefit schemes and individual defined-contribution schemes. The members of the fund are the risk bearers and the funds manage risk aimed at providing an adequate income level during retirement at low costs. Dutch pension funds are evolving into such stand-alone pension schemes. Some directions for future reforms are sketched.

AB - Corporate defined-benefit plans suffer from a number of serious weaknesses, including credit risk of the sponsor, ambiguous ownership of the surplus and back-loading of benefits. Also defined-contribution plans feature drawbacks. Individuals are not well equipped to make the complex financial decisions involved, transaction costs are substantial and various risks are not managed properly over the life cycle. Stand-alone collective pension schemes offer an attractive third way between corporate defined-benefit schemes and individual defined-contribution schemes. The members of the fund are the risk bearers and the funds manage risk aimed at providing an adequate income level during retirement at low costs. Dutch pension funds are evolving into such stand-alone pension schemes. Some directions for future reforms are sketched.

M3 - Article

VL - 16

SP - 443

EP - 467

JO - International Tax and Public Finance

JF - International Tax and Public Finance

SN - 0927-5940

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ER -