Pension plans and retirement replacement rates in the Netherlands

This study examines the expected retirement replacement rates of several cohorts of Dutch employees at the time of their planned retirements. It also imputes the actual replacement rates based on available pension records. We find that using reasonable indexation rates, the expected replacement rate is higher than the ones we compute. Larger discrepancies are found for younger cohorts. We research the difference between the two replacement rates and find that the mismatch is related to poor institutional knowledge. We also show the role of assumptions on institutions and wage profiles in determining our results.