Policy Seminar: The optimal mix of the first and second pension pillar
Thursday December 8th, Thomas Michielsen (CPB) will present "The optimal mix of the first and second pension pillar".
Time: 13.00-14.00 hours
Location: CPB-office, Bezuidenhoutseweg 30, The Hague, room 3 - BG065B
Presentation: Sander Muns (CPB)
Discussant: Ed Westerhout (CPB)
Registration: Please register here
This paper explores the optimal mix of first and second pillar pension schemes. Recently some policy proposals in the Netherlands consider a higher first pillar pension scheme, possibly at the expense of the second pillar. Our simulation of several financial variables and Dutch demographics shows an intuitive trade-off. On the one hand, first pillar pensions are less volatile than second pillar pensions, because population growth is less uncertain than financial market returns. On the other hand, demographic risk is not negligible at longer horizons and the median return of the first pillar is lower. To deal with risks stemming from demography and asset markets, diversification effects suggest that a mix of first and second pillar pensions is socially optimal. An increase in life expectancy has a more immediate and profound effect on first pillar benefits, but also affects second-pillar replacement rates in the medium and long run.
CPB organises policy seminars for policy makers, researchers and other stakeholders. These policy seminars focus on policy implications. Policy seminars are held on Thursday from 1.00 pm. to 2.00 pm.
CPB also organises seminars for researchers. During these seminars, always held on Tuesday from 1.00 pm. to 2.00 pm., academic papers are presented and discussed.
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