NETHERLANDS – PensionsLab, a think tank for young workers in the Netherlands, has advised pension funds to start promising less in order to avoid future disappointments.
It argued that the discount rate for liabilities was too high, and had had the opposite effect policymakers intended.
The PensionsLab's 60 participants, presenting their extended views on Dutch pensions reform, also stressed the importance of guarantees and the certainty they offered.
They said the new system should focus on real pension rights, but argued that limited nominal guarantees were "absolutely necessary".
They said both positive and negative financial shocks should be spread out for pension fund participants "symmetrically" – and preferably within the shortest amount of time possible – under the new pensions contract.
They also said the collective approach of the current pensions system must remain.
During their presentation – hosted by pensions provider PGGM – the PensionsLab's participants underlined the importance of clear communication "without tables or calculations".
They lastly argued that Dutch pension funds should increase their investments locally, but only against attractive returns.
Peter Borgdorff, director of the €135bn healthcare scheme PFZW and a guest at the PensionsLab event, said: "We want the right ratio between risk and return. However, love must be reciprocated."
Borgdorff referred to the recent decision of the Dutch Treasury to cease paying inflation compensation for external investments in local infrastructure projects.
Gerard Riemen, director of the Pensions Federation, said: "The voice of the younger generations should be listened to, to maintain support for the pensions system."
In his opinion, the PensionsLab could be instrumental for the necessary changes.
The PensionsLab is an initiative of the youth branches of the CNV, FNV and MHP unions.