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Abstract

More than 90% of employees in the Netherlands compulsorily accrue pensions via their employer. Experiences abroad, supplemented by empirical research among Dutch households, suggest that, without this automatism, large groups of employees would build up much less pension. Procrastination, self-control problems, and limited financial knowledge and skills frequently lead to low pension savings and low returns on the accrued pension capital. Mandatory retirement saving prevents these problems. The Dutch mandatory participation works well and there is no reason for drastic modifications. What can be studied, however, is how mandatory retirement saving for the self-employed can result in a better pension build-up.

Views expressed are those of the authors and do not necessarily reflect official positions of De Nederlandsche Bank (DNB). Comments by Aerdt Houben, Fieke van der Lecq, Onno Steenbeek and Job Swank on earlier versions of this contribution are gratefully acknowledged. We thank Gita Gajapersad and Rob Vet for statistical assistance.

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van Els, P.J.A., van Rooij, M.C.J., Schuit, M.E.J. (2007). Why mandatory retirement saving?. In: Steenbeek, O., van der Lecq, F. (eds) Costs and Benefits of Collective Pension Systems. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-74374-3_9

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