An analysis of the Dutch-style pension plans proposed by UK policy-makers

Abstract Collective Defined Contribution (CDC) pension schemes are a variant of collective pension plans that are present in many countries and especially common in the Netherlands. CDC schemes are based on the pooled management of the retirement savings of all members, thereby incorporating inter-generational risk-sharing features. Employers are not subject to investment and longevity risks as these are transferred to plan members collectively. In this paper, we discuss policy related to the proposed introduction of CDC schemes to the UK. By means of a simulation-based study, we compare the performance of CDC schemes vis-à-vis typical Defined Contribution schemes under different investment strategies. We find that CDC schemes may provide retirees with a higher income replacement rate on average, together with less uncertainty.

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Report of the Investment Products for Retirement Savings Working Party: “Is there a place in the UK Defined Contribution pensions market for a guaranteed savings product?” ‐ Abstract of the London discussion

British Actuarial Journal ◽

10.1017/s1357321713000251 ◽

2013 ◽

Vol 18 (3) ◽

pp. 657-675

Author(s):

Scott Eason

Keyword(s):

Working Party ◽

Retirement Savings ◽

Defined Contribution ◽

Publication Type ◽

The Uk

This abstract relates to the following paper:EasonS., BarkerP., ForoughiG., HarsantJ., HunterD., JarvisS., JonesG., KnavaV., MurphyP., MurrayK., MuthulingamJ., OdoziN., PageT., WashomaK. & WebbA.Is there a place in the UK Defined Contribution pensions market for a guaranteed savings product?British Actuarial Journal, doi:10.1017/S135732171300024X

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Automatic enrolment to pension plans in small organisations: a research agenda

Employee Relations ◽

10.1108/er-06-2017-0138 ◽

2019 ◽

Vol 41 (1) ◽

pp. 142-157 ◽

Cited By ~ 1

Author(s):

Maureen Maloney ◽

Alma McCarthy

Keyword(s):

Firm Size ◽

Pension Plans ◽

Occupational Pension ◽

Pension Policy ◽

Policy Makers ◽

Research Attention ◽

Content Type ◽

The Usa ◽

The Uk ◽

Small Employers

PurposeThe purpose of this paper is to analyse how firm size impacts pension workforce coverage with a particular focus on automatic enrolment (AE) to pension plans in small organisations.Design/methodology/approachThe paper examines the alignment of government AE interests with those of small employers, their employees and pension providers to better understand how firm size impacts pension workforce coverage.FindingsThe alignment of interests between stakeholders (government, pension providers, employers and employees) differs between large and small organisations, and empirical findings from large organisations cannot be assumed to apply in small organisations.Research limitations/implicationsThe paper calls attention to the need for future empirical research and identifies a number of research questions for further analysis to examine how AE impacts pension participation in small organisations and advance the field.Originality/valueThe policy of automatically enroling employees into occupational pension plans, recently legislated for all eligible workers in the UK and under consideration in the USA and Ireland, was developed from research conducted in a small number of large organisations. Pension coverage is particularly inadequate for the large number of employees working in small organisations (1–49 employees). However, little research attention has been focussed on pensions in small organisations with pension policy makers assuming that legislated AE will work as effectively in small organisations as it did in large organisations. This paper addresses this gap in the field.

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Pension Design and Risk Sharing: Mixed Solutions Between Defined Benefit and Defined Contribution for Public Pension Schemes

Economic Challenges of Pension Systems ◽

10.1007/978-3-030-37912-4_14 ◽

2020 ◽

pp. 311-339

Author(s):

Pierre Devolder ◽

Sébastien de Valeriola

Keyword(s):

Risk Sharing ◽

Public Pension ◽

Defined Benefit ◽

Defined Contribution ◽

Pension Schemes ◽

Mixed Solutions

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Measuring retirement savings adequacy: developing a multi-pillar approach in the Netherlands

Journal of Pension Economics and Finance ◽

10.1017/s1474747214000341 ◽

2014 ◽

Vol 15 (1) ◽

pp. 55-89 ◽

Cited By ~ 36

Author(s):

MARIKE KNOEF ◽

JIM BEEN ◽

ROB ALESSIE ◽

KOEN CAMINADA ◽

KEES GOUDSWAARD ◽

...

Keyword(s):

Pension System ◽

Vulnerable Groups ◽

Median Income ◽

Retirement Savings ◽

Housing Wealth ◽

Replacement Rate ◽

Data Set ◽

Public And Private ◽

Private Savings ◽

The Uk

AbstractThe Dutch pension system is highly ranked on adequacy. These rankings, however, are based on fictitious replacement rates for median income earners. This paper investigates whether the Dutch pension adequacy is still high when we take into account the resources that people really accumulate, using a large administrative data set. A comprehensive approach is followed: not only public and private pension rights, but also private savings and housing wealth are taken into account. Summed over all age- and socioeconomic groups we find a median gross replacement rate of 83% and a net replacement rate of 101%. At retirement age, 31% of all households face a gross replacement rate that is lower than 70% of current income. Public and occupational pensions each account for more than 35% of total pension annuities. Private non-housing assets account for 14% and imputed rental income from net housing wealth accounts for about 10%. Some vulnerable groups, such as the self-employed, have below average replacement rates. Results are fairly similar to results found in the UK, indicating that we should be careful in evaluating the adequacy of pensions systems on the basis of fictitious replacement rates.

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