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The pensions journey 2007

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  1. The pensions journey2007 Maarten Dijkshoorn CEO and Chairman of the Executive Board of Eureko 30 November 2007

  2. Demographic trends in the Netherlands 2006 2020 2040 2060 Age group 0 – 19 4.0m 3.8m 3.8m 3.8m 20 – 64 10.0m 9.8m 9.2m 9.5m 65+ 2.3m 3.2m 4.0m 3.6m Total 16.4m 16.8m 17.0m 16.9m Grey power 23.4% 33.0% 43.3% 37.4% *Source: Statistics Netherlands, adapted by Strategy & Intelligence Unit of Pensions Division

  3. The pension landscape in the Netherlands Pension awareness: • People would rather go to the dentist than think about their pension • Pension awareness goes hand in hand with one’s first reading glasses • The majority of employees have no idea how much they will receive after retirement

  4. Netherlands: world’s highest pension reserves Global top ten: pension capital as % of GNP in 2005 1. Netherlands 2. Iceland 3.Switzerland 4. US 5. UK 6. Finland 7. Chile 8. Singapore 9. Australia 10. Malaysia 50 70 90 110 130 Source : OECD

  5. Estimated growth of second pension pillar Pension Contributions 40.000 37.969 36.609 35.323 34.107 Total 32.959 32.727 31.151 29.460 30.000 26.354 21.731 20.696 Sectoral Pension Funds 19.710 18.772 17.878 17.878 21.849 16.093 13.903 11.048 20.000 18.431 17.092 9.238 Company Pension Fund 8.399 7.514 6.588 6.722 6.859 6.991 6.999 6.782 7.451 7.142 7.288 3.592 10.000 2.530 2.632 Insurers 9.650 9.190 9.019 8.753 8.566 8.276 8.336 7.855 7.939 7.502 7.561 6.946 € mio - 1999 2000 2001 2002 2003 2004 2005 2006F 2007F 2008F 2009F 2010F Source: The Dutch Bank

  6. The pension landscape in the EU • Three-pillar system in most Member States • Pension systems differ in Member States • Tax and supervisory regimes • Providers • Funded and unfunded • Transferability of pension capital

  7. Company pension funds: the backbone of the Dutch pensions system State Company pension funds Personal pensions 100% 90% 80% 70% 60% 50% 40% 30% Unbalanced 20% Balanced 10% 0% Germany Italy France Netherlands Switzerland Spain UK Source: : B ö rsch - Supan

  8. The pension landscape in the EU • Politicians are aware that current pensions systems are not sustainable • Member States are reforming their pension systems • Open coordination method • Pay-as-you-go is no longer sustainable • Retirement age is rising and early retirement schemes are being abolished • Examples: France, Germany, Greece, the Netherlands, Belgium

  9. Conclusions • The pension landscape in the EU is changing • An internal market for pension providers is a reality, but tax systems differ • Pension reforms will ensure that systems are more sustainable • Need to search for a better balance between the three pillars • The challenge for the Netherlands is to export pension knowledge and become an international centre for pension providers