When entering the site and if cookies are prevented from being saved, a message must be displayed
in a popup message box informing the user that their local browser settings are preventing
cookies from being saved and that cookies are required for the site to work. Exact text
to be provided for UAT. On OK click of the message, the user should be redirected to
the global landing page (currently ssga.com).
The Dutch pension system has a reputation for being one of the best in the world; however the Dutch express a bleak outlook on their retirement future, echoed by Global Retirement Reality Report data. So what is going wrong?
In this snapshot, we examine the unease, distrust and lack of awareness that prevails as the Netherlands transitions away from an unsustainable defined-benefit (DB) construct, amid prolonged public debate, and towards a model that borrows heavily from defined-contribution (DC) plans.
The Dutch have a low level of pension awareness
Dutch people don’t have a strong sense of responsibility regarding their pension provision, nor do they have much knowledge of the plan particulars, as reflected by survey respondents’ not knowing how much they had saved to-date, the level of contributions they make versus their employer, or what investment or drawdown choices are available to them.
The Dutch feel unprepared
Nearly two-thirds of Dutch respondents are not confident that they will be able to retire when desired or maintain their standard of living in retirement. Half of Dutch respondents are not confident that they will be financially prepared for retirement, questioning whether their pension benefit will stay at current levels and last over time. Together, these sentiments are furthering significant anxiety.
Additionally, of the countries surveyed, the Netherlands reflects the greatest gap in estimating retirement income. When workers were asked what percentage of working income they think they will have access to in retirement, they significantly underestimated their pension benefit, assuming they will have to make do living on a third of their current income. Dutch retirees reported a much rosier reality, living on two-thirds of their working income in retirement.
In the Netherlands, lifelong retirement income payouts and fixed benefits are mandatory. However, in 2016 changes were introduced into the regulatory framework that enabled more flexibility in benefit payouts. This relatively new array of retirement income options has not been fully embraced. In fact, of all people surveyed, Dutch respondents expressed the highest preference for their historical payout experience — a steady retirement income payout (42%).
Even though doubt lingers among many Dutch people, current and planned reforms represent an opportunity for innovation.
Observing the challenges that face legacy DC models in other countries, some of which were established decades ago, the Netherlands is able to bring fresh thinking to optimizing DC scheme design. The new DC model is seeking to deliver a retirement savings structure that combines flexibility in the early years of
retirement with fixed and predictable lifelong income later in life. Other planned enhancements include a high contribution level and nearly full participation by all workers.
The views expressed in this material are the views of SSGA Defined Contribution as at April 30, 2018, and are subject to change based on market and other conditions.
State Street Global Advisors Netherlands, Apollo Building, 7th floor Herikerbergweg 29 1101 CN Amsterdam, Netherlands. Telephone: 31 20 7181701. SSGA Netherlands is a branch office of State Street Global Advisors Limited. State Street Global Advisors Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom
This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected.
The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2014/65/EU) and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor's or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.
The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Investing involves risk including the risk of loss of principal.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent. Diversification does not ensure a profit or guarantee against loss.
This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
Images of NYSE Group, Inc. are used with permission of NYSE Group, Inc. Neither NYSE Group, Inc. nor its affiliated companies sponsor, approve of or endorse the contents of this program. Neither NYSE Group, Inc. nor its affiliated companies recommend or make any representation as to possible benefits from any securities or investments.