Transition to a new pension contract
Exploring value transfers in the double transition
In the Netherlands there are advanced plans for a new pension contract. This could require a transfer of existing pension rights from the old to the new contract. This thesis studies the transition to several of the proposed pension contracts, without making a choice for one of the variants. To study the impact of the transition on different generations, the existing pension rights are valued both in the old and the new contract. In this manner the inter generational redistribution for different transition methods can be quantified. In general a transition based on nominal rights will not reflect the value distribution under the current contract. Working generations would prot most, because they no longer have to pay for building up a buffer. In the proposed new contracts, the system of uniform contribution and uniform accrual (doorsneesystematiek) would be replaced by an actuarially fair contribution scheme. This is studied as a separate transition for which again the loss in value of different generations is calculated. Earlier research has shown that workers in mid career lose most, this is confirmed. It turns out however that the total loss has a maximum in the interest rate and will be lower than the earlier found 100 billion euros. Ultimately, these two transitions are combined to study their joint impact. The double transition works partly in the sense that the two transitions have an opposite effect for the working generations, but that the net effect can still be a significant loss. The double transition will work better for low interest rates than for high ones and will not work when a large buffer is built up in the new contract.