Essays on collective funded pension schemes

Many pension systems worldwide have welfare enhancing properties, but seem unsustainable due to ageing problems, low interest rates and the recent financial crisis. Revisions of pension systems are required to improve sustainability, even in some cases this might reduce the generosity of pension arrangements. This dissertation covers several topics in collective funded pension arrangements, inspired by the revisions of pension arrangements worldwide and, in particular, the Dutch pension scheme.
The first three chapters investigate mandatory participation in collective pension schemes both qualitatively and quantitatively. Chapter 2 serves as an introduction to pension system design with a focus on the Dutch pension system and compares its mandatory features with other countries. In the quantitative part (Chapters 3 and 4) we model the risk that a pension system collapses in absence of mandatory participation. The remaining chapters explore other aspects of collective pension schemes, in particular intergenerational risk-sharing (Chapter 5), the stability of the funding ratio, i.e. the ratio of the pension fund's assets over its liabilities (Chapter 6) and herding in investment behaviour (Chapter 7). Each chapter is self-contained and can for this reason be read separately from the other chapters.