Retirement on a DC pension in NL and UK

Both the Dutch and the UK workplace pension system have been transitioning from Defined Benefit (or the Dutch Collective DC) pension schemes, towards a more Defined Contribution (DC) type of scheme.

In these DC pension schemes; members will bear more of the risk in terms of managing their income in retirement. The way this transition is handled in both countries varies. The Dutch pension system attempts to mitigate some of the risk to members, using a ‘solidarity’ system, whereas the British pension system allows members the ability to be more flexible in their retirement choices, but they must make these decisions individually. Hence, the options at retirement, as well as the financial risk involved, are quite different.

This paper will compare the Dutch collective decumulation phase to the individual British decumulation phase in order to examine both the positives and the negatives of the two systems and discusses:

• Why many of us will retire on a DC pension

• The Dutch Retirement Options

• The UK Retirement Options

• Unifying both systems into an improved approach through potential improvements that could be made to each pension system and summarizes the findings of the research project

• A brief refresher of the pension systems in both countries

Download our paper here

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