Pensions
What will be the average size of future payment of pensions and their distribution over various target groups?
Contact: Jan Nelissen
Supplementary pensions: future payments and the Emancipation-Effect Report
A research project commissioned by the Ministry of Social Affairs and Employment aimed to establish the average size of future payment of pensions and their distribution over various target groups. Advanced simulation techniques were used in this project. Its point of departure was to produce a representative file, detailing individual labour market histories. With the aid of realistic data on the type of job he/she held, the likelihood of unemployment or disability, etc., each individual was assigned a career and the income development appropriate to it. Each individual was then evaluated on the occurrence of a break in pension contributions due to unemployment etc. or on a steady pattern of income growth and pension build-up. This facilitates the inventory of pension build-up developments in frequently occurring career patterns, including a link to pension results. The table below gives an example of the results that were obtained.
Supplementary pension received (excluding Old Age Pension) as a percentage of final pay per cohort
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Birth cohort
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Men
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Women
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Total
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1930
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21,2
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9,0
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17,8
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1940
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26,8
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11,8
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22,7
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1950
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31,9
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18,1
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27,0
|
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1960
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34,4
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18,5
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27,9
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1970
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35,5
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18,9
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28,8
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In addition, it was investigated to what extent the system of supplementary pensions (indirect) proved to be discriminatory towards women. A distinction was made between the degree of access to supplementary pension schemes (women are more often excluded from participation than men) and the quality of the scheme (women tend to be more often employed in sectors with relatively poor pension schemes).
Publications:
- Nelissen, J.H.M. (2000), Aanvullende Pensioenen: Toekomstige Uitkeringen en Emancipatie-Effect-Rapportage.
- Nelissen, J.H.M. (2000), Een onbezorgde oude dag? Economisch Statistische Berichten 85, pp. 548-550.
- Nelissen, J.H.M. (2000), Sekse, neutraliteit en pensioenen. Economisch Statistische Berichten 85, pp. 571-573.
Pensions: regulations, perceptions, and preferences
How have the pensions of the Dutch population been arranged, and what are their views on current pension schemes and possible future reforms?
Contact: Klaas de Vos
The Dutch population is ageing. More and more people depend on their pension schemes for a source of income. This project, commissioned by the Ministry of Finance, has looked into the pension arrangements of a representative sample of the Dutch population and into their views on current pension schemes and possible future reforms. The report contains a wealth of data, part of which indicate that only few people prove to be well informed about their pension scheme particulars. Nevertheless, most people are on the whole fairly satisfied with their pension arrangements. Among the proposals for maintaining the Old Age Pensions Act in the future, plans for setting aside funds now enjoy great popularity.
Publications:
- Vos, K. de, R.J.M. Alessie, P.F. Fontein (1997), Pensioenen: regelingen, percepties en preferenties, Economisch Instituut Tilburg, Tilburg.
- Vos, K. de, R.J.M. Alessie, P.F. Fontein (1998), Pensioenpreferenties, Economisch Statistische Berichten.
Pension schemes in the Netherlands
Which senior citizens are entitled to income in the form of a pension in addition to AOW pension rights for all elderly? The composition of senior citizen incomes has also been investigated.
Contact: Klaas de Vos
In the framework of an international collaborative project, including the IFS in London, we investigated which senior citizens are entitled to income in the form of a pension in addition to AOW pension rights for all elderly. The composition of senior citizen incomes has also been investigated. Job-related, funded pension schemes make up a relatively large and increasing share of senior citizen incomes in the Netherlands and the United Kingdom. This is in contrast with countries like Germany, France, and Italy, where government-arranged pensions based on an apportionment system have a greater currency.
Publication:
- Vos, K. de and A. Kapteyn (1998), Pension provision in The Netherlands, in: R. Disney and P. Johnson (red.), Pension systems and retirement incomes across OECD countries, Edward Elgar, Cheltenham.
Effects of changes in early retirement schemes on average retirement age
This research project for the Ministry of Social Affairs and Employment investigates if and to what degree a transition from the VUT early retirement scheme to more actuarially neutral retirement schemes can induce greater labour participation of 55-65-year-olds.
Contact: Jan Nelissen
The labour participation of 55-65-year-olds in the Netherlands is relatively low. This is true for both women and men, many of whom take early retirement. The proportional rise in the ageing population and the concomitant pressure on the labour market call for policies that aim to promote labour participation. This research project for the Ministry of Social Affairs and Employment investigates if and to what degree a transition from the VUT early retirement scheme to more actuarially neutral retirement schemes can induce greater labour participation of the 55-65 age category.
The possible effects of such a transition have been investigated by means of a survey. The VUT scheme offers a payment percentage of 80% of last-earned wages, irrespective of retirement age. The alternatives presented to the respondents offer a payment percentage of 70% of last-earned wages upon retirement at the age of 62. Upon earlier or later retirement, pension payments go down or up, respectively. The VUT scheme allows people to retire between the ages of 60 and 65. The first alternative – a pre-pension scheme – puts the retirement age between 55 and 65; the second alternative – a flexi-pension scheme – allows retirement between the ages of 61 and 70. The latter alternative, therefore, allows for continued employment beyond what is current practice. Both alternatives would result in considerably longer employment and, hence, higher labour participation among 55-65-year-olds. The table below presents some figures for the central European Coordination scenario, in line with the CPB.
Labour participation of 55/65-year-olds in 2010 and 2020
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2010
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2020
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1. VUT scheme
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272.000
|
426.000
|
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Employed
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708.000
|
863.000
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Participation percentage
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32,5%
|
36,0%
|
|
2. Pre-pension scheme
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174.000
|
265.000
|
|
Employed
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806.000
|
1.024.000
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|
Participation percentage
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37,0%
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42,7%
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3. Flexi-pension scheme (net)
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102.000
|
133.000
|
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Employed
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878.000
|
1.156.000
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Participation percentage
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40,3%
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48,2%
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By 2010, we will see higher participation figures of 4.5% or 7.8 %, respectively, compared to the VUT scheme. By 2020, these figures will have risen to 6.7% and 12.2%, respectively. A fully actuarially neutral scheme leads approximately to a 2% increase in labour participation.
Publication:
- Bevordering arbeidsparticipatie ouderen; Het effect van wijzigingen in vervroegde uittredingsregelingen op de arbeidsparticipatie van oudere werknemers. Doetinchem: Elsevier Bedrijfsinformatie BV. 172 pp. ISBN 9057498073.
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