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Knot cited ownership rights as one of the biggest hurdles to the creation of a “future-proof” pension system. “People must have realistic expectations about their future pension – not only about its level, but also the risks,” he said. To do this, he said, pension funds had to be more transparent on ownership rights. Knot also called for “tailor-made pension arrangements”, such as an age differentiation for allocating risks. “Older workers need more risk protection, as they have fewer options for additional measures, while younger workers are in a better position to counter risks,” he said.
Knot also called for a tailor-made approach to pensions accrual, arguing that the current average had had “significant negative effects” for participants who freelance at some point during their career. He added that tailor-made solutions also required more freedom of choice for participants, to suit their personal needs.
The DNB president warned, however, that the margin for freedom of choice was slim as long as there were no clear ownership rights, while the average contribution principle had caused a “structural redistribution of pension rights”. Knot said a balanced risk allocation across all participants was the third condition for a solid pensions system. “Participants’ trust in the system is eroding when certain generations are systematically disadvantaged.”
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