Reform Options for Mature Defined Benefit Pension Plans: The Case of the Netherlands
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Summary:
The Netherlands has been operating fully funded, defined benefit second pillar pension schemes that have consistently ranked high worldwide for delivering high replacement rates while featuring strong solidarity among members. Yet the long-term sustainability of the Dutch pension funds has been undermined in recent years by protracted low interest rates and unfavorable demographic developments, exacerbating controversies over intergenerational transfer mechanisms within the plans. This has prompted a national debate over ways to move toward more individualization while preserving financial security at retirement for all. This paper draws on this experience, illustrated by stress testing simulations and assessed vis-à-vis solutions implemented in peer countries, to discuss the main policy trade-offs associated with the reform of mature pension systems in advanced economies.
Series:
Working Paper No. 2019/022
Subject:
Aging Expenditure Labor Labor markets Pension spending Pensions Population and demographics Wages
English
Publication Date:
January 25, 2019
ISBN/ISSN:
9781484395912/1018-5941
Stock No:
WPIEA2019022
Pages:
30
Please address any questions about this title to publications@imf.org