Transition to a new pension contract in the Netherlands: Lessons from abroad

This report presents lessons and observations from abroad that can help in the successful completion of the current pension reforms in the Netherlands. These lessons are based on discussions with and texts from a large number of international experts from nine countries that have gone through a similar reform process. The lessons are organized into two categories, namely lessons and observations regarding (1) the reform process and (2) pension design. An important observation is that it was difficult to define what we are doing in the Netherlands, not only in the eyes of foreign experts, but also of Dutch participants during a Netspar debate. Confusion around the terminology Defined Benefit (DB) and Defined Contribution (DC) played a central role in this. It is clear that we are taking a unique step in the Netherlands, particularly because of the transformation of accrued rights into accrued capital. This has not been done before. It is important to create a crystal-clear and honest storyline and to communicate it well. The road to the new contract does not only involve technical implementation, but a long and winding path to build and maintain trust. A new contract also raises entirely new questions and creates new dynamics.