No Smoke, No Mirrors: The Dutch Pension Plan
In the Netherlands, a system rests on the idea that each generation should pay its own costs — and that those costs must be measured accurately.
Hasnain says:
"But something else happened: Dutch young people found their voice. No matter their employment sector, they could see that their pension money was commingled with retirees’ money, then invested that way by the outside asset management firms. In the wake of the financial crisis, they realized that they and the retirees had fundamentally opposing interests. The young people were eager to keep taking investment risk, to take advantage of their long time horizon. But the retirees now wanted absolute safety, which meant investing in risk-free, cashlike assets. If all the money remained pooled, young people said, the aggressive investment returns they wanted would be diluted by the pittance that cashlike assets pay."
Posted on 2014-10-13T22:39:31+0000