Transition to a new pension contract in the Netherlands – Lessons from abroad

Discussions on Dutch pension reform are currently converging towards an end. A number of requirements were set and should be part of the new pension contracts, such as the abolishment of the uniform contribution & accrual system (“doorsneesystematiek”), limited smoothing across generations and the use of a risk free discount curve for valuation, if any discount curve is needed. Agreement on pension contracts will eventually provide us with a clear end point; a dot on the horizon.

Next, we will need to determine how to transition towards that new pension contract. This is a major technical challenge but will also depend on support in society, legal constraints etc.   The challenges will moreover depend on the circumstances during the transition period, the goal we want to reach and the time we give ourselves to reach that goal.

This project looks at the transition process towards a new pension contract. In particular, it examines what the Netherlands may learn from similar transitions in other countries. We look at countries close by such as the UK, Denmark and Sweden, as well as countries further away such as Australia and Chile. All these cases provide lessons on how to arrange a balanced transition, what to do and what NOT to do.

Read the paper here.