Recently, “Pension Challenges for a Thriving Society in 2122” a survey among 1,133 Dutch people, was published as part of 100 years of ABP. It looks back at 100 years of pensions and looks ahead to the long-term opportunities and challenges facing the Netherlands. What are these opportunities and challenges? And how will they affect the future of our pensions? We asked Research Director Martijn Lampert of Glocalities, the company that conducted the study.
In the survey, commissioned by ABP and APG, Dutch people were surveyed to gain insight into the values that play an important role in their wishes, expectations and concerns. They were asked to look back on the past century and look ahead to the next 100 years. The goal: a broader perspective on the topic of pensions, enabling us to better deal with the challenges ahead.
The research shows that Dutch people see solidarity and compulsory membership as important elements for the future of our pensions. Freedom of choice is considered much less important. The Dutch also value the security of their pensions and the fact that it grows with the economy. However, 3 in 5 Dutch people fear that the security of retirement will decline over the next 100 years. But only 3 percent of Dutch people are really aware of the new system.
If we want to get the topic of pensions closer to people, we have to realize that our perspective on society in general is shifting, Lampert says. From economic, rational, purely neoliberal thinking - the homo economicus - we are shifting toward the homo florens, who is more focused on well-being.
Can you explain why this shift from homo economicus to homo florens is happening?
“After World War II, everything was about increasing our economic prosperity. The homo economicus is focused on self-interest and wealth, and with that premise we have been successful for a very long time. With this, and through hard work, we achieved the welfare state and economic prosperity and helped build the liberal world order. But by now we have also seen the limitations of this way of thinking, making homo economicus less of a given. The context has changed dramatically, nationally and internationally. The image no longer matches people’s aspirations and world experience.”
What are these limitations of the homo economicus?
“We’re exhausting the earth, inequality is increasing, we have more and more burnouts. In this way, society is no longer sustainable. Many people at this time feel uprooted, alienated, abandoned. By politics, by those in power. So, the question then is: how did we get here and how can we change it? An interesting result of the study is that older people look more pessimistically at society as a whole and its development in recent times, but on average are more positive about the development of their standard of living than young people. Young people, on the other hand, see the past century in a more positive light, but are more pessimistic about the development of their standard of living in the future.”
How can society be sustainable?
“Our thinking should not be determined solely by the growth idea of homo economicus. The idea homo florens, for whom quality of life and thriving is more important, is going to have to play a greater role. The homo florens reaches maturity when he or she can achieve deeper values. The survey shows a need for more justice and solidarity. And, of course, prosperity is still important; people also appear to fear its loss. But in hopes and desires there is more emphasis on well-being. Individualism no longer reigns supreme. When it comes to the question about in which direction society should develop, respondents indicate that safety, respect, caring, justice and solidarity are important. The lesson from this study is that in order to meet societal challenges, much more attention needs to be paid to the interpretation of these types of values. I think it is important for administrators to realize that they will further alienate citizens if these values are not reflected in their narrative and in the policy choices they make.”
How hopeful are people? Do they think the tide can still be turned?
“In many areas, respondents have negative expectations for the future, but expect that these negative developments can still be reversed. This applies, for example, to the quality of education and income inequality, but also to pension security, solidarity in pensions between generations and the welfare state. In other areas, they do not expect negative developments to be reversible. People are especially defeatist when it comes to ethnic tensions, political tensions and citizens dropping out of Dutch society. On the other hand, they are optimistic about the knowledge economy and gender equality.”
3 in 5 Dutch people fear that pension security is going to decline over the next 100 years. At the same time, it appears that only 3 percent of Dutch people are really aware of the new system. How can we change this?
“If you approach retirement as something technical, for many people it is a distant and uninteresting topic, even though it is incredibly relevant, of course, because it is about their future income. And respondents also indicated that the security of a pension is important to them, but when it comes down to it, they don’t really pay very much attention to it. To bring the topic of retirement closer to people, I think you have to start the conversation with them about their desires, their ambitions and the values that are important to them now. What kind of future do they want? That is the question we focused on in this study, and it shows that there is a strong desire for more equity and solidarity. For a pension fund, that is a good starting point in the conversation with participants, because a pension fund is an excellent way to facilitate solidarity. Moreover, many Dutch people cite ‘enjoying life’ and ‘being healthy’ as important life goals, so as a fund you can also pick up on that when talking to them.”
So, the survey showed that having that conversation is a key challenge for pension funds. Can you name one more?
“How do we avoid a lack of perspective for young and future generations? They will feel the effects of climate change the most. Moreover, for them the development of the standard of living is increasingly stagnating, compared to previous generations. At the same time, those younger generations are standing up for themselves less and less: 50 percent of the world’s population is under 30, while only 2.5 percent of parliamentarians are. That makes not only the conversation about intergenerational solidarity relevant, but also the conversation about what you invest in as a pension fund. We need to make sure that thinking about retirement becomes rooted in a broader vision of quality of life and the future of society. When you enter into a conversation with participants about such fundamental values, you contribute to this.”
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