June 14, 2007

Measuring lifetime redistribution in Dutch occupational pensions

Herverdeling in het ouderdomspensioen

Press release
In het Nederlandse stelsel van aanvullende pensioenen vinden forse overdrachten plaats van mannen aan vrouwen en van laag- aan hoogopgeleide mensen. Hoog- en middelbaar opgeleide vrouwen bouwen zodoende gemiddeld meer pensioenaanspraken op dan waarvoor ze betalen, ten koste van vooral laag- en middelbaar opgeleide mannen.

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This paper quantifies lifetime redistribution in Dutch occupational pension schemes associated with uniform pricing. Information about the extent of redistribution is important because it will influence the public acceptance of the pension system. 

The uniform contribution rate is split up into a saving share and a transfer share for different socioeconomic groups. The transfer share, in turn, consists of intergenerational and intragenerational transfers.

We find that the relative size of the saving- and transfer shares strongly depends on socioeconomic characteristics, such as gender and level of education. The saving part is higher for females than for males and it increases with the level of education, which implies that uniform pricing involves a large transfer from males to females and from low educated to higher educated workers. The impact of intergenerational transfers is modest.


Jan Bonenkamp