Intergenerational transfers in the new Dutch pension contract
van Bilsen,Servaas Mehlkopf,Roel J. van Stalborch,Stephan
van Bilsen,Servaas
Mehlkopf,Roel J.
van Stalborch,Stephan
Abstract
This paper measures intergenerational transfers through the solidarity reserve of the newly proposed Dutch occupational pension contract. Our first conclusion is that the role of the solidarity reserve is higher than it may appear at a first glance. The fraction of pension savings that can go directly into the solidarity reserve is limited to 10%. However, we find that, in addition, around 30% of the pension savings of a young worker can subsequently be transferred to the solidarity reserve via a levy on future positive excess returns. Our second finding is that the solidarity reserve can introduce a substantial pay-as-you-go element within a funded pension scheme. This feature of the solidarity reserve can be overlooked easily and is not mentioned in the pension bill. Our policy recommendation to pension funds is to make explicit whether or not there is a pay-as-you-go element via the solidarity reserve, and if so to assess whether this is desirable.
Description
Date
2022-02
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Volume Title
Publisher
Research Projects
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Keywords
Funded pension schemes, Solidarity reserve, Intergenerational transfers, SDG 1 - No Poverty, SDG 8 - Decent Work and Economic Growth
Citation
van Bilsen, S, Mehlkopf, R J & van Stalborch, S 2022, 'Intergenerational transfers in the new Dutch pension contract', Economist-Netherlands, vol. 170, no. 1, pp. 37-67. https://doi.org/10.1007/s10645-022-09399-4