IPE: Dutch economists call for capital-funded private pensions

07 September 2011

Two leading Dutch economists have argued that the EU and its Member States should encourage capital-funded private pensions, as they can enlarge the capital market and the market for pension services, as well as improve risk sharing between the generations.

Capital-funded private pensions will also benefit economic growth in the EU, said Lans Bovenberg, professor at Tilburg University, and Casper van Ewijk, professor at Amsterdam University and deputy director of the Netherlands Bureau for Economic Policy Analysis (CPB).  In their opinion, capital-funded private pensions should be stimulated through voluntary agreements between Member States, in combination with EU-regulated pension markets. "Therefore,", they added, "EU regulation should not force schemes to deliver a guaranteed pension, but encourage them to efficient risk-sharing and to transparent communication on the effects for individual participants". They explained that the EU should take a back seat on enforcing free individual choice for pension provision because of the "institutional variety" for resolving imperfections on the pension market.

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