IPE: Opaque Dutch pension system shifting towards DC

16 November 2012

Casper van Ewijk, deputy director of the Bureau for Economic Policy Analysis (CPB), said that the Dutch pension system will transition to a defined contribution system within five years if the industry is unable to improve transparency of pension rights.

Van Ewijk, also a professor of economics at the University of Amsterdam, noted that the current system still allowed for risk-sharing. He conceded that the country's pension industry faced the challenge of introducing transparency to pension rights at a time of system-wide underfunding and repeated rights cuts to restore individual funds coverage ratio to the minimum level of 104.5 per cent.

In his talk on the macro-economic consequences of pension supervision, Van Ewijk also argued that contribution increases should in future be used sparingly to improve the financial health of underfunded pension systems, noting that the recent Pensions Agreement seemed to accept the necessity of other measures.

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