finance, retirement

De Correspondent has another great analysis piece, this time on the Dutch retirement system (pensioenstelsel). It’s based largely on savings, which sounds good, until you take a closer look. It appears for every euro paid out in retirement, nearly 20 cents are spent on management and operations costs (pensioenkosten), while the more common apportion methods seen abroad, where the state simply take a percentage of tax revenue and pays out to elders, is much cheaper to operate. The Dutch system is actually half-half, a base retirement income is guaranteed for every citizen, and this fund, which is 50% larger, spends per euro paid out 0.3 cents on operations.

There are some other downsides mentioned of saving money in such quantities. In comparison to other countries, I’ve always wondered why personal savings are so much discouraged in Netherland but corporate saving is not. It’s not fair and limits personal freedom. Another way the Dutch ‘system’ gently pushes people to stay in line I guess. Perhaps it is why so many financial loopholes run through Netherland or through it’s dependencies: when you actually have money, you’re going to look for a way around this nonsense!