Dutch Pension Funds in Underfunding: Solving Generational Dilemmas
AbstractPension funds in the Netherlands are facing their second solvency crisis within a period of six years. As most Dutch pension funds effectively are arrangements of intergenerational risk sharing, especially the larger sector pension funds, the necessary recovery process implies various generational dilemmas. We distinguish various policy options, among them contribution rate increases and benefit cuts, and compare them on the aspect of intergenerational redistribution. Most pension funds in the Netherlands stem from the 1950s, and the current pension plan setting still reflects standards of that period. This practice is currently at stake. The introduction of a new regulatory framework built upon fair-value accounting and risk-based solvency supervision forces pension funds to reconsider their pension plan design and funding process. We discuss a number of reform proposals that currently are in debate.
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Bibliographic InfoPaper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2009-29.
Length: 20 pages
Date of creation: Nov 2009
Date of revision: Nov 2009
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Other versions of this item:
- Kortleve, N. & Ponds, E.H.M., 2009. "Dutch Pension Funds in Underfunding: Solving Generational Dilemmas," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3710341, Tilburg University.
- NEP-ALL-2010-02-05 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jan Bonenkamp, 2007. "Measuring lifetime redistribution in Dutch occupational pensions," CPB Discussion Paper 81, CPB Netherlands Bureau for Economic Policy Analysis.
- Hans J. Blommestein & Pascal Janssen & Niels Kortleve & Juan Yermo, 2009. "Evaluating the Design of Private Pension Plans: Costs and Benefits of Risk-Sharing," OECD Working Papers on Insurance and Private Pensions 34, OECD Publishing.
- Kortleve, N. & Ponds , E.H.M., 2006. "Pension deals and value-based ALM," Open Access publications from Tilburg University urn:nbn:nl:ui:12-348156, Tilburg University.
- Joao F. Cocco, 2005. "Consumption and Portfolio Choice over the Life Cycle," Review of Financial Studies, Society for Financial Studies, vol. 18(2), pages 491-533.
- Eduard Ponds & Niels Kortleve, 2010.
"How to Close the Funding Gap in Dutch Pension Plans? Impact on Generations,"
Issues in Brief
ib2010-7, Center for Retirement Research, revised Apr 2010.
- Kortleve, N. & Ponds, E.H.M., 2010. "How to close the funding gap in Dutch pension plans? Impact on generations," Open Access publications from Tilburg University urn:nbn:nl:ui:12-4561530, Tilburg University.
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