The Political Economy of Pension Reform
Edited by Martin Rein and Winfried Schmähl
Chapter 5: The Quality of the Dutch Pension System: Will it be Sustainable in the Twenty-first Century?
5. The quality of the Dutch pension system: will it be sustainable in the twenty-ﬁrst century? Leny H. van der Heiden-Aantjes INTRODUCTION In this chapter I want to give my perspective on the question whether the Dutch pension system should be considered sustainable or not. After a short review of the birth of the system, the development over the last decades of the past century will be described. The question is: does the Dutch system need further reform in the twenty-ﬁrst century? The chapter begins with a brief outline of the three pillars of the Dutch pension system. Subsequently, recent developments and the developments to be expected in the future will be described. Finally, the question whether the Dutch pension system is sustainable in the twenty-ﬁrst century is answered. THE SYSTEM The Dutch old age pension system in its broadest sense is a three-pillar system. The ﬁrst pillar is the AOW: a basic pension under a statutory national insurance scheme, providing an equal pension for all residents at a level related to the net minimum wage level. The second pillar is formed by the occupational non-statutory pension schemes supplementary to the general old age pensions Act (AOW). Occupational pension schemes are part of (collective) labour agreements. They can diﬀer widely from each other, depending on each diﬀerent agreement. Most prominent within the range of occupational pension schemes are the company pension schemes and the branch pension schemes. Participation in a branch (or industrywide) pension fund...
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