The solidarity reserve legally unraveled

An “intrinsic” part – legally established as an obligation – of the new pension contract is a solidarity reserve for intergenerational risk sharing. According to the Main Line Memorandum on the elaboration of the pension agreement, this is a collective capital, filled with premiums and returns, with which risks are divided over age groups (current and future generations). With this solidarity, more stable and on average higher pension outcomes would be attainable. The elaboration of the solidarity reserve must be included in the pension regulations under the preconditions that the “rules of the game” are laid down in advance, are balanced and that the reserve cannot become negative. A solidarity reserve is also possible with the improved premium scheme. These elements raise various legal questions. For all these questions, we take the solidarity reserve as the starting point and from there assess the implications for the contract and for the executors.

Research questions

1. The legal nature of the reserve
2. Difference in type of pension provider and (obligation to maintain) the reserve, including
   1. Differences between pension funds and other administrators
   2. Position of foreign providers
   3. Specific PPI and feasibility of the WVP contract with / without solidarity reserve
3. The “ownership” of the reserve (including value transfer)
4. Legal rules for the operation of the reserve (filling and withdrawal)
5. Relevance of “no premium, but right” per pension provider
6. Solidarity reserve and effect on existing WFP schemes
7. Solidarity reserve: significance for sustainability of obligation
8. The role of the supervisors

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