How to share the pain of the pension crisis?

Concerning the crisis, it investigates whether postponing intervention in the pension rights of participants (i.e. also include negative indexation) leads to a skewed distribution of sharing the pain among generations. The results show that postponing intervention leads at least to a very skewed distribution of the pain after two years. After the current crisis has been solved a new pension system needs to be thought of. Such a new contract should be explicitly defined such that participants (and pension fund’s management) know beforehand what to do in times of crisis. This research tries to contribute to this discussion by introducing (amongst others) an innovative framework of anticyclic supervision. The results of this framework are very good. No drawbacks can be found. The research concludes with a critical assessment of the supervision on the pension sector by DNB. Finally this research is a call for the implementation of less risky investment mixes by pension funds. The results show that commoninvestment mixes of pension funds (of about 50% in equity) should be adapted to less risky mixes like 20% in equity.