There is “great support” from both pension savers and pensioners for the buffer fund in the new pension system in the Netherlands, according to APG.

The asset manager and pension investment firm noted that, in the reformed system, pension income and assets will move with the economy, and financial setbacks can be absorbed through the ‘solidarity reserve’.

This is a shared buffer fund that aims to share both windfalls and setbacks among participants that occur because of, for example, investment risks and fluctuations in inflation or life expectancy.

APG stated that the buffer ensures more stable and more equal benefits, and mitigates the differences between ‘unlucky’ and ‘lucky’ generations.

The solidarity reserve must be no more than 15 per cent of pension fund assets and must never fall into the negative.

Dutch pension funds will be able to partially decide how the solidarity reserve is filled and when it is used.

“We therefore asked 2,105 retired and active members of 38 industry pension funds to what extent they want to show solidarity with other pensioners and working people,” said APG researcher, Evert Webers.

“The most important insight that the survey provided us with is that, among active members and retirees of the surveyed funds, there is great support to share windfalls and setbacks in solidarity with each other.”

The survey also found that the more people value solidarity, the greater their support for specific ways to fill and spend the buffer fund.

Furthermore, the average saver and pensioner were willing to give more to the buffer fund than they expect to receive in return.

“That was very striking to us, although it fits in with the other insights,” Webers noted.

APG’s research also found that there were three main groups when it came to the buffer fund, as APG senior strategist research & analytics, Eduard Ponds, explained: “There is a group of people who want to help others without question; that is altruism.

“Then there’s a group that values reciprocity, or in other words, what goes around comes around.

“And the third group focuses primarily on self-interest. The degree of support for the pension buffer varies by group and corresponds to what you might expect: The greatest support exists among the altruistic group and the least among the group that values self-interest the most.”

The survey also found that there was more support for the buffer fund amongst public sector pension fund members than private sector pension fund members.

APG asked respondents about their views on solidarity in other areas, such as healthcare and employment, and solidarity in pensions ranked around the middle of the various different areas of solidarity.

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