Reallocation of individual pension assets to survi-ving dependent’s pension: a stated preference analysis
“The willingness to reallocate pension assets is highly heterogeneous”
The Dutch pension system’s second pillar allows employees to reallocate old-age pension to surviving dependent’s pension within certain fiscal limits. This paper documents the outcomes of a stated preference experiment to measure the reallocation preferences of employees with a partner in the age group 55 to 65 years. This considered five hypothetical allocations ranging from no reallocation (partner only has right to own pension in the first pillar) to complete reallocation (surviving dependent receives same pension income as joint pension when partner still lived).
Key Takeaways for the Industry
- Communication about surviving dependent’s pension options must be improved and should involve the participant’s partner, as both partners’ economic preferences play a role in reallocation choices.
- A clear choice architecture with transparent products is needed.