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How to Measure and Apply Risk Preferences in the Second Pension Pillar

Demografiske endringer og en foruroligende økonomisk situasjon har lagt press på pensjonssystemet i Nederland. For å få på plass et bærekraftig pensjonssystemet har regjeringen foreslått flere reformer, deriblant overgangen til en ny pensjonskontrakt for tjenestepensjoner. To ulike typer for pensjonskontrakt analyserer og drøftes i denne rapporten.

Pension funds and social partners can choose between the nominal contract and the real contract. In the nominal contract, the creation of the buffer implies that pension members are relatively sure of a nominal payment.
In the real contract, there is the ambition to index the pension claims in order to keep the purchasing power of members at a constant level. However, the certainty of the buffer is absent. With the transition to one of these two options, more of the financial and longevity risk is shifted to pension members. It seems therefore fair to take into account the risk preferences of the individuals by pension funds in order to make a choice between the nominal and the real contract.
The real contract seems to imply a more risky investment mix. The ambition is higher, making that the expected return of investments done should be higher. Therefore, the funds should measure how strong the willingness by their members is to keep their purchasing power at a constant level or whether they prefer thecertainty of a nominal payment.