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Recovery measures of underfunded pension funds: higher contributions, no indexation or pension cuts?

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  • DE HAAN, LEO

Abstract

Using recovery plan data of 213 underfunded Dutch pension funds for the years 2011, 2012 and 2013, discrete choice models are estimated describing pension funds' choices between three recovery measures: higher contributions, no indexation and pension cuts. The estimation results suggest, first, that pension cuts are more likely when the funding ratio is very low, there is little time left for recovery, the pension fund is not a corporate pension fund, and its participants are still relatively young. Second, the results suggest that Dutch pension funds consider contribution increase first, no indexation second and pension cuts only as a last resort.

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  • De Haan, Leo, 2018. "Recovery measures of underfunded pension funds: higher contributions, no indexation or pension cuts?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 17(4), pages 437-468, October.
    • Handle: RePEc:cup:jpenef:v:17:y:2018:i:04:p:437-468_00
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    Cited by:

    1. Rob Bauer & Dirk Broeders & Annick van Ool, 2023. "Walk the green talk? A textual analysis of pension funds’ disclosures of sustainable investing," Working Papers 770, DNB.
    2. Broeders, Dirk W. G. A. & Jansen, Kristy A. E. & Werker, Bas J. M., 2021. "Pension fund's illiquid assets allocation under liquidity and capital requirements," Journal of Pension Economics and Finance, Cambridge University Press, vol. 20(1), pages 102-124, January.
    3. Carlos Vidal Meliá & Juan Manuel Pérez-Salamero González & Anne M. Garvey & Anna Castañer Garriga, 2024. "The supplementary table on pensions (Table 29): Actuarial Balance Sheet Update for the Spanish Pension System to 2021, Wave Three," Studies on the Spanish Economy eee2024-18, FEDEA.
    4. Boermans, Martijn A. & Galema, Rients, 2019. "Are pension funds actively decarbonizing their portfolios?," Ecological Economics, Elsevier, vol. 161(C), pages 50-60.
    5. Jansen, Kristy, 2021. "Essays on institutional investors, portfolio choice, and asset prices," Other publications TiSEM fd998408-d282-4e0f-b542-4, Tilburg University, School of Economics and Management.

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