NETHERLANDS – Research backed by the Dutch government has found that a move to career-average pensions would help to limit the impact of demographic ageing.

“The pension system will fare better against the coming demographic ageing of the population if pension funds change from final-salary schemes…to a career average scheme,” said the social security and employment department in a statement, citing the research.

“The career average scheme increases the possibilities for a balanced income development between workers and pensioners,” it added.

The 119-page research report was produced last month by the Rotterdam-based Research Centre for Economic Policy, or OCFEB, in association with the social affairs ministry and research foundation the Stichting Pensioenwetenschap.

OCFEB itself is a joint venture between the Economic Affairs, Finance, Social Affairs ministries, along with the Nederlandsche Bank and Erasmus University.

The social security department said the peak of demographic ageing will take place around 2040, adding that it would result in a tight labour market, higher salary costs and higher collective charges.

The study saw the wider Dutch economy becoming more sensitive to the international financial markets as Dutch pension funds mature.

Social security minister Mark Rutte has sent the research to parliament.

The European Commission said yesterday that the Netherlands is in a “relative good position” to meet the costs of ageing, based on current policies.

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