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Making the Dutch Pension System Less Vulnerable to Financial Crises

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  • Jens Høj

    (OECD)

Abstract

The Dutch occupational pension system has been successful in securing high asset accumulation to fund generous pension promises. However, for the second time in this decade the pension system has been affected by a financial crisis and many pension funds’ assets fell below levels needed to meet regulatory requirements. Insufficient funding raises solvency issues, which could eventually lead to large fiscal costs in case of bail-outs. In response to the crisis, most funds were required by the regulator to draw up recovery plans to restore their funding over five years. This has raised concerns that the adjustment required by the regulator is unnecessarily sharp, with possibly adverse macroeconomic implications. On the other hand, OECD simulations indicate that under current policies, it is unlikely that funding rates will be secured that enable the funds over the long term to fulfil their promises of a replacement rate of up to 80% of average wages. This raises the challenge of implementing parametric changes that secure pension benefits without large detrimental effects on intergenerational equity and growth. Occupational pensions are transferable, which enhances labour market mobility. But it is often very difficult for workers to assess how one pension scheme compares to another, posing practical barriers to mobility that should be eased. This Working Paper relates to the 2010 OECD Economic Survey of the Netherlands (www.oecd.org/eco/surveys/ netherlands). Rendre le système de retraite néerlandais moins vulnérable aux crises financières Le système de retraite professionnel néerlandais a permis d'assurer une forte accumulation d'actifs destinés à financer de généreuses promesses de pension. Néanmoins, pour la seconde fois au cours de cette décennie, le système de retraite a subi le contrecoup d'une crise financière, et le niveau des actifs de nombreux organismes de retraite est tombé en deçà du seuil prévu par la réglementation. Cette capitalisation insuffisante soulève des problèmes de solvabilité, qui pourraient déboucher à terme sur d'amples coûts budgétaires en cas de renflouement. À la suite de la crise, l'autorité de régulation a imposé à la plupart des organismes de retraite d'élaborer des plans de redressement afin de ramener leur capitalisation à un niveau satisfaisant dans un délai de cinq ans. Or, certains craignent que l'ajustement exigé par l'autorité de régulation ne soit trop brusque, et qu'il ne puisse avoir des conséquences préjudiciables sur le plan macroéconomique. Cela dit, les simulations de l'OCDE indiquent que les politiques actuelles ne déboucheront pas à long terme sur un coefficient de capitalisation permettant aux organismes de retraite de tenir leurs engagements d'assurer des taux de remplacement pouvant aller jusqu'à 80 % du salaire moyen. Cela soulève la question de l'application de changements de paramètres permettant de garantir les prestations de retraite sans nuire fortement à l'équité intergénérationnelle et à la croissance. Les retraites professionnelles sont transférables, ce qui favorise la mobilité des travailleurs. Néanmoins, il leur est souvent très difficile de comparer les différents régimes de retraite, ce qui représente en pratique un obstacle à la mobilité, qu'il conviendrait de réduire. Ce document de travail se rapporte à l’Étude économique des Pays-Bas de 2010 (www.oecd.org/eco/etudes/Pays-Bas).

Suggested Citation

  • Jens Høj, 2011. "Making the Dutch Pension System Less Vulnerable to Financial Crises," OECD Economics Department Working Papers 832, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:832-en
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    File URL: http://dx.doi.org/10.1787/5kgkdgg5fxd3-en
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    More about this item

    Keywords

    crise financière; financial crisis; Pension solvency; plans de redressement; recovery plans; Solvabilité du système de retraite;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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