July 21, 2024 | 12:39

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The Netherlands moves towards a pension model based on the Chilean system

Maria Jose Gonzalez

July 8, 2023 | 11:00 a.m.

In a surprising turn of events, the Netherlands have decided give up their traditional pension system, often criticized as a Ponzi scheme. Instead, they will adopt a model more similar to the one used in Chile, which allows taxpayers personally manage your contributions to pension plans and decide the level of risk for your portfolio.

Say goodbye to the Ponzi system

The Netherlands, which until now has been characterized by a pension system that many compare to a Ponzi schemeThey have decided to change course. This comparison is due to the fact that the system was based on the idea that current workers finance the pensions of retirees, and that when these workers retire, they will be financed by the next generation of workers.

The adoption of the Chilean system

Instead, the Netherlands has opted for a pension system similar to the Chilean model. This model allows workers contribute individually to their pension plans and, crucially, it also allows them to decide the level of risk from your wallet.

Workers in the driver's seat

This new direction puts workers in the driver's seat. Now they will have greater control over your financial future, with the ability to choose how and where your contributions are invested. This model empowers workers, giving them a more responsibility and, at the same time, greater autonomy.

Expected impact of the change

The impact of this change will be significant. It is expected to give workers more control over your investments and allows them to adapt their pension plans to their individual needs. This could lead to a overall improvement in pension results, and could set a precedent for other countries considering similar reforms.

Potential challenges and risk mitigation

However, this new system is not without its challenges. Workers must now face the reality of making difficult financial decisions and navigate an investment market that can be difficult to understand. To mitigate this risk, it is essential that educational and advisory tools to help workers make informed decisions.

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