The Move Towards Riskier Pension Products in the World’s Best Pension Systems

torsdag, 12 juli 2018

The Danish and the Dutch pension systems are often referred to as “among the best in the world”. We compare pension systems and pension products in Denmark and The Netherlands. We focus on the shifts that take place in both countries, from pension products with relatively low levels of risk for the participant to pension products with more risk but also higher expected return.

We find that despite many similarities, there are also important differences. These relate in particular to differences regarding communication about risks and returns, rules and regulations, and supervision. We also present results from a case study, where pension holders were given the chance to shift from a low-risk product to a higher-risk product. Young male economists in big cities with low guarantees and low pension wealth are more likely to give up guarantees. We end out drawing lessons that are relevant for the future discussions in Denmark, The Netherlands, and other countries.