Differentiating Indexation in Dutch Pension Funds
29 Pages Posted: 20 Jan 2011
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Differentiating Indexation in Dutch Pension Funds
Differentiating Indexation in Dutch Pension Funds
Date Written: December 30, 2010
Abstract
We investigate numerically how indexation of funded pensions for inflation can be differentiated across the various groups of fund participants. The pension arrangement is modelled after the Dutch situation. While the aggregate welfare consequences are small, group-specific consequences are more substantial with the workers and future born losing and retirees benefitting from a shift away from uniform indexation. Those welfare shifts result from systematic redistribution of welfare rather than shifts in the benefit of risk sharing provided by the system.
Keywords: indexation, funded pensions, welfare effects, pension buffers, stochastic simulations
JEL Classification: H55, I38, C61
Suggested Citation: Suggested Citation
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