The envisaged pensions reform in the Netherlands is unlikely to cause costs for pensions provision to explode as has happened in Australia, a survey by PwC has suggested.
The study – commissioned by the Dutch government – attributed the pension costs increase in Australia to insufficient legal protection for pension savers who, for example, must pick their own provider.
As the pensions agreement sticks to the mandatory participation in a pension fund, choosing a provider is not an issue in the Netherlands, said the consultancy.
The independent survey had been instructed by parliament, which showed concern over steeply rising costs in the wake of Australia’s pensions reform.
PwC, which surveyed seven pension funds, two insurers, two pension providers, as well as the Pensions Federation, stated that all players found it difficult to come up with an estimation of costs after the transition to a new pensions system.
This was due to uncertainties in the elaboration of the pensions accord as well as its translation into legislation, it explained.
It said that, in general, costs will rise as a result of complexity through adding individual variables, including allocating returns to age cohorts and differing investment profiles.
The consultancy indicated that costs for communication were likely to rise as the different aspects of the new system need to be extensively explained in order to keep the support of pension funds’ participants.