NETHERLANDS - International pension experts have heaped praise on the Dutch pension system and the way the industry has responded to the challenges of the credit crisis.

During a conference on pension reform organised by Netspar - the platform for pensions, retirement and ageing - and the Netherlands Bureau for Economic Policy Analysis, Nicholas Barr, professor of public economies at the London School of Economics, said: "The Netherlands has done a lot of things right."

According to Barr, the Dutch system has been able to protect pensioners and older workers from excessive sharp shocks, in part through adjusting to demographic change and macroeconomic turbulence, as well as through adjusting benefits and contributions.

He added that the Netherlands also offered lessons in risk sharing.

However, the professor added that the Dutch system would not necessarily work for other countries.

"The Netherlands is quite a homogenous country, and the politicians have an effective dialogue with the social partners of employers and employees," he said.

Richard Hinz, pension policy adviser at the World Bank, said he shared Barr's positive view.

"Although the Dutch system, with its multi-pillar model, is not perfectly aligned with the ideal situation, it is as close as can be found today," he said.

However, Hinz said he saw transparency problems on redistribution due to the promise of the predominant defined benefit arrangements, as well as on inter-generational equity.

Henning Bohn, professor of international and public economics at the University of California, was less upbeat about the Dutch system's outlook.

"Probably because of demographic ageing, the inter-generational risk sharing has been weakening through a drift toward defined contribution plans," he said.

Bohn wondered whether an increase in the retirement age in the Netherlands should have been encouraged earlier and more aggressively.

Barr also warned against making adjustments in the pension system too quickly, which is "sub-optimal".

"Think of a slower pace, or a lag, rather than implementing sharp adjustments immediately," he said.