Join the club: what associational democracy can teach us about pension fund governance

Both scholarly and public debates on the governance of occupational pension funds seem to gravitate between two extremes. On the one hand, we find arguments in favor of some degree of compulsion for workers to participate in an occupational pension plan. On the other hand, we find proponents of a system, in which plan participants are free to act on their individual preferences with regards to their pension scheme. In this paper, I want to bring attention to a third variety of pension fund governance. In this associational form of pension fund governance, the active and inactive members of the pension fund form a self-governing collectivity that is responsible for the pension scheme. In this paper, I will build on existing political science literature on associational democracy to argue that the associational form of pension fund governance may provide several important benefits. Among these are increased involvement of plan participants with regards to their pensions and an increase in accountability and transparency of the pension fund. To test the argument, this paper will review a recent policy experiment with collective voice in the Dutch occupational pension system, the introduction of so-called pension associations for the liberal professions (beroepspensioenverenigingen).