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Amsterdam School of Economics Amsterdam School of Economics

ASE researchers advise government on calculations for new pension system

13 December 2022

The Dutch Minister for Poverty Policy, Participation and Pensions, Carola Schouten, received the report of the Parameters Committee last week. ASE professors Antoon Pelsser, Casper van Ewijk and Michel Vellekoop were among the members of the Committee who wrote the advisory report. They were present during the official presentation to the Minister.
L to R: Casper van Ewijk, Michel Vellekoop, and Antoon Pelsser

All 3 ASE professors and Committee chair Professor Femke de Vries (University of Groningen) also gave a technical briefing in the Dutch parliament. This briefing explained their recommendations to the parliamentary standing committee on Social Affairs and Employment.

Parameters for a new model and a new pension system

The Dutch government intends to transition to a new pension system. A new model had to be developed to generate various economic scenarios that will be used in the calculations for the new system, and updated parameters will be used in the new model. The Dutch government regularly seeks out scientific advice and asked the Parameters Committee to define these parameters.

Quantitative information

Part of the new model can be seen as a ‘scenario generator’ that will be used in the valuation of uncertain cash flows such as pension payments and premiums. The results provide quantitative information which plays a key role in the debate surrounding the new national pension agreement. In this context, the parameters and scenarios are also important when it comes to the transfer of 1,500 billion euro in pension entitlements from the old system to the new system. The transition to the new system is a complex process and will come into effect in the coming years, if approved by the Dutch parliament.