Pension Risk Communication in The Netherlands

Over the past decade, in many countries pension risk has been shifted to employees. The Netherlands is no exception, and the Dutch government has introduced mandatory pension risk communication. As of 2019, pension projections must be presented for three scenarios. This paper discusses the mandatory communication against the backdrop of the literature on pension communication, behavioral evidence and pension finance. The conclusion is that the mandatory communication is inadequate in helping plan members to be protected against pension income risk and may even reduce wellbeing because of loss aversion. We suggest alternative ways, based on behavioral evidence and finance principles to help pension plan members deal with the pension risk forced upon them.