On May 30, 2023, a new pensions act was adopted (Wet toekomst pensioenen). This constitutes an important step forward in reforming the Dutch pension system. The system is becoming more personalized and transparent. Also it will respond to economic developments more quickly. This will provide greater potential for indexation, but also for cuts… Many questions remain. How exactly will the system be further structured? What might the preferred choices for fund administrators be? How well does the new system accommodate today’s labor market? Will the new system make it easier for independent contractors to save for retirement? Is the new system less confusing? How do you communicate uncertainty? And how do you restore confidence in the system?

In this dossier, we rely on the findings from our existing (topical) research to provide insight and clarification on the main features of Minister Koolmees’s letter to the Dutch cabinet from June 2020 and the pension agreement. We zero in on three principal themes:

1. The new Pension contract
2. The transition
3. Communication and trust

Will the new pension contract put an end to the generational conflicts related to pensions? Two contract variants have been proposed, with the definitive choice yet to be made. What are the new contract forms for pension funds? Will this help us move from perceived promised results to realistic expectations? What will it mean for the distribution of risks and returns across generations?

• Personal life events and individual risk preferences, Paul Bokern (UM, CBS), Jona Linde (UM), Arno Riedl (UM, IZA Bonn and CESifo), Hans Schmeets (UM, CBS) and Peter Werner (UM).
• Protection, over en projection Efficiency, Bas Werker (TiU)
• The Choice between variants from the pension agreement, Theo Nijman (TiU)
• Managing inflation risk in the New Dutch Pension Contract, Rens van Gastel¹, Niels Kortleve¹, Theo Nijman² and Peter Schotman³ (¹PGGM, ²TiU, ³UM)
• Income effects at and after the transition to the new Dutch pension contract, Sander Muns, Theo Nijman and Bas Werker (TiU)
• Income smoothing with equal adjustments, Sander Muns (TiU)
• Pension Payout Preferences, Rik Dillingh and Maria Zumbuehl (CPB)
• Smoothed return allocation, Anne Balter and Bas Werker (TiU)
• The solidarity provision legally unravelled, Erik Lutjens and Herman Kappelle (VU Amsterdam)
• Listen to the two podcasts about Dutch Pension in the far future.
• The advantages of the solidarity reserve unraveled, Servaas van Bilsen ¹, Roel Mehlkopf ², Antoon Pelsser ¹ ³ (¹UvA, ²TiU & Cardano, ³MU)
• Gemengde gevoelens rond het nieuwe pensioenstelsel, Harry van Dalen (NIDI-KNAW/TiU), Kène Henkens (NIDI-KNAW/UMCG/UvA) (in Dutch)
• Completing Dutch pension reform, Ed Westerhout¹ ³, Eduard Ponds¹ ² and Peter Zwaneveld³ (¹TiU, ² APG, ³CPB)
• Responsibility allocation for planning pension provision, Fieke van der Lecq (VU), René Maatman (RU), Mark Irwin (TKP Pensioen), Raoul Salden (APG), Jop Versteegt (Achmea), Roel Wilms (MN)
• Investment policy in the case of uncertainty about risk aversion and budget, Agnes Joseph¹, Antoon Pelsser ² ³, Lieke Werner¹ (¹Achmea, ²UM, ³UvA)
• Listen to the podcast about the new pension contract with Bas Werker (TiU), Dick Boeijen (PGGM) en Martine Wolzak (FD) (in Dutch)
• Watch the knowledge videos on the new pension contract with Bas Werker (TiU) in collaboration with pension educators SPO (in Dutch).
• “Flash webinar: Wat verandert het pensioenakkoord… en wat niet?” (What is changing in the pension agreement… and what remains the same?, Bas Werker (TiU) (In Dutch)
• “Interest-rate risk, the life cycle, and the pension contract“, Netspar Brief, Roel Mehlkopf (TiU) (in Dutch)
• “Welke vaste dalingen en welk beleggingsbeleid passen bij gewenste uitkeringsprofielen in verbeterde premieregelingen?“, Johan Bonekamp, Lans Bovenberg, Theo Nijman, Bas Werker (all TiU) (in Dutch)
• “Het effect van de vaste daling en het smeren van schokken op variabele uitkeringen“, Anne Balter en Bas Werker (both TiU) (in Dutch)

In deze Netspar podcast geeft Gerard van Olphen zijn visie op de verre toekomst van pensioen.

Deze podcast is een registratie van het event van een projectgroep onder leiding van Fieke van der Lecq (VU) en René Maatman (RU). Zij lieten op 1 juli 2021 zien hoe scenario’s kunnen helpen bij het voorbereiden op een onzekere toekomst.

The new pension contract with Bas Werker (TiU), Dick Boeijen (PGGM) and Martine Wolzak (FD) (in Dutch)

Bas Werker: Return allocation in the new pension contract

Bas Werker: Project efficiency in the new pension contract

The pension agreement specifies that pension contributions will not be age related. The more or less firm commitment to future life-long pension benefits is being abandoned and the system of uniform contributions will disappear. Accrual will occur through a defined contribution scheme with equal contributions for young and old. The transition to the new system raises many questions and costs. The guiding premise is to evenly distribute the costs and benefits of the transition across various generations. In addition, the survivors pension is being redesigned to be simpler and more uniform.

• Pension system transition – division of responsibilities between social partners and pension funds, René Maatman and Mark Heemskerk (RUN)
• The transition to the new Dutch pension system, Anne Balter ¹, Jan Bonenkamp ² and Bas Werker ¹ (¹ TiU, ² APG)
• An overview of methods measuring risk preferences, Paul Bokern¹², Jona Linde¹, Arno Riedl¹, Hans Schmeets¹², Peter Werner¹ – ¹Universiteit Maastricht, ²Centraal Bureau voor de Statistiek
• Transition to a new pension contract in the Netherlands – Lessons from abroad, Benne van Popta¹ and Onno Steenbeek² (¹EUR en APG, ²Pensioenfonds Detailhandel)
• Future of the labor market and pension – A long-term exploration, Klaas Bangma (STAR, FNV), Lambrecht van Eekelen (SVB), Casper van Ewijk (Netspar, UvA), Kees Kamminga (Aegon), Ian Koetsier (Min EZK), Niels Kortleve (PGGM), Timo Lambregts (EUR), Emmie Lewin (PostNL), René Sterk (DNB), Esther Valentijn-Breedveld (PGB Pensioendiensten), Ton Wilthagen (TiU), Alice Zulkarnain (CPB, IZA)
• Listen to the three podcasts about Pension & labor market: a good pension for everyone.
• Risk Sharing within Pension Schemes, Anne Balter¹, Frank de Jong¹ and Antoon Pelsser ² ³ – ¹ TiU, ² UM, ³ UVA
• Investing for Retirement with an Explicit Benchmark, Anne Balter¹, Lennard Beijering², Pascal Janssen³, Frank de Jong¹, Agnes Joseph⁴, Thijs Kamma⁵ and Antoon Pelsser⁵⁶ – ¹ TiU, ² Zanders, ³ PGGM, ⁴ Achmea, ⁵ UM, ⁶ UVA
• Watch the three knowledge videos by Casper van Ewijk (in conjunction with pension educators SPO) addressing the transition from different perspectives, for example “Transitie binnen de premieregeling“. (in Dutch)
• Determining the market value of existing entitlements in a defined benefit plan, by Bas Werker, Theo Nijman, Marcel Lever, Theo Kocken, Sacha van Hoogdalem, Lans Bovenberg, Kees Bouwman, Jan Bonenkamp, Dick Boeijen and Anne Balter. (in Dutch)
• Low interest rates and pension sustainability; Fully funded versus pay-as-you-go systems, Netspar Brief 20, Casper van Ewijk (TiU). (in Dutch)
• Legal aspects: Changing industry pension schemes: Between pension fund administrator and social partners, Jop Tangelder (RUN). (in Dutch)
• Survivors pension no longer assured, Netspar Brief by Michael Visser and Bastiaan Starink (both TiU). (in Dutch)

Part I of this series is about the necessary reform of the pension system against the background of developments on the labor market with Casper van Ewijk en Niels Kortleve.

Part II of this series is about the labor market of the future with Ton Wilthagen en Marjolein ten Hoonte.

We conclude with Raymond Montizaan and Jaap Oude Mulders, in part III they talk about the aging labor market.

Casper van Ewijk: The transition from benefit agreement to the new contract

Casper van Ewijk: The transition from a benefit agreement to an improved contribution scheme (WVP)

The pension system is often seen as vastly complex; it is based on convoluted processes. Who understands these? And how do you explain them? Another facet here is that the new system will move more in tandem with economic developments. There is a greater chance of indexation. Yet, if the economy does poorly, there is also a greater chance of cuts. What is the best way to communicate this “uncertainty,” and is there a way to still build confidence?

• Listen to the podcast on pension communications and working on understandability and confidence with Martine Wolzak (FD), Marike Knoef (LU) en Hans Hoeken (UU) (in Dutch)
  
• Watch the knowledge videos on the new pension contract with Marike Knoef (LEI) in collaboration with pension educators SPO: How do you explain it? And “how do you communicate uncertainty”? (in Dutch).
• More freedom of choice/lump sum: “Keuzes rondom pensioen: implicaties op uitkeringssnelheid voor een heterogeen deelnemersbestand“, Servaas van Bilsen (UvA), Johan Bonekamp (TIU) and Eduard Ponds (TIU en APG).
• Raising pension awareness through letters and social media, Marike Knoef, Jim Been and Marijke van Putten (LEI i.s.m. Pensioenlab)
• Using social norms to motivate pension participants, Joyce Augustus-Vonken (APG), Lisa Brüggen, Thomas Post and Pieter Verhallen (Maastricht University)

Marike Knoef: How do you explain the new pension contract to the participant?

Marike Knoef: How do you communicate about uncertainty in the new contract?