Dutch Fund Governance and Financial Services

Abstract

In the Netherlands, the retirement income system is perceived by policymakers to have several advantages over the Anglo-American model: the Dutch system apparently preserves the elements of co-determination and collective bargaining so essential to post-war European political stability, while providing for financial growth and innovation so important in the Anglo-American securities markets. This chapter presents three points. First, the principles of Dutch social solidarity have been the basis of a two-tiered national pension system with extensive coverage of eligible workers and equitable consequences in relation to the long-term distribution of retirement income. Second, the governance of sector pension funds combined with their connection with collective bargaining raises important issues of selection bias and moral hazard. Third, the idea that national pension systems and financial markets are properly off limits to geographical scope is debatable. This chapter also discusses social security and supplementary pensions, the institutional structure of social solidarity, pension fund governance and performance, and financial structure in the context of the European competition policy.