Considerations on income and value effects per participant when entering the new contract

Netspar is commissioned by the Ministry of Social Affairs and Employment to carry out a research project to provide insight into the effect of the various “buttons” (instruments) in the pension outcomes (scores based on the criteria mentioned). These will be illustrated numerically by means of realistic examples for funds with different age compositions and initial funding ratios based on an ALM model that is to be developed.

Existing rights are valued on the basis of Value Based ALM or the standard method. Contrary to the available calculations of the CPB, the possibility is being considered of using a “fixed descent” to avoid shortening at, or just after, entry. And not only the average pension result over the remaining life expectancy is considered, but also results per year.

Read the paper here.