Reforming Dutch Occupational Pension Schemes

A.L. Bovenberg, R.H.J.M. Gradus

Research output: Working paperDiscussion paperOther research output

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.
Original languageEnglish
Place of PublicationTilburg
PublisherNETSPAR
Number of pages17
Volume05/2014-017
Publication statusPublished - 28 May 2014

Publication series

NameNetspar Discussion Paper
Volume05/2014-017

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biometry
property rights
ownership
plan
risk management
distribution
conflict
surplus

Cite this

Bovenberg, A. L., & Gradus, R. H. J. M. (2014). Reforming Dutch Occupational Pension Schemes. (Netspar Discussion Paper; Vol. 05/2014-017 ). Tilburg: NETSPAR.
Bovenberg, A.L. ; Gradus, R.H.J.M. / Reforming Dutch Occupational Pension Schemes. Tilburg : NETSPAR, 2014. (Netspar Discussion Paper).
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Bovenberg, AL & Gradus, RHJM 2014 'Reforming Dutch Occupational Pension Schemes' Netspar Discussion Paper, vol. 05/2014-017 , NETSPAR, Tilburg.

Reforming Dutch Occupational Pension Schemes. / Bovenberg, A.L.; Gradus, R.H.J.M.

Tilburg : NETSPAR, 2014. (Netspar Discussion Paper; Vol. 05/2014-017 ).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Reforming Dutch Occupational Pension Schemes

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AU - Gradus, R.H.J.M.

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N2 - 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.

AB - 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.

M3 - Discussion paper

VL - 05/2014-017

T3 - Netspar Discussion Paper

BT - Reforming Dutch Occupational Pension Schemes

PB - NETSPAR

CY - Tilburg

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Bovenberg AL, Gradus RHJM. Reforming Dutch Occupational Pension Schemes. Tilburg: NETSPAR. 2014 May 28. (Netspar Discussion Paper).