Are NDC pension plans a useful alternative for the Netherlands?

“Exploring options for strengthening pensions for everybody”

Eroding participation in mandatory pension plans and the reduced scope of intergenerational risk sharing are two problems for which a non-financial defined contribution (NDC) system, also known as a notional DC scheme, can provide a solution. This paper explores the possible implementation of several variants of NDC’s. It also discusses other alternative solutions.

Key Takeaways for the Industry

• NDC offers a comprehensive solution for greater pension coverage and more indexation.
• Ensuring a neutral impact across generations in implementing NDC will require long, gradual implementation.
• A combination of measures therefore seems the obvious choice in finding a workable solution.