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18-Nov-2011
The pension system performs well in terms of keeping old age poverty low, but is not providing much diversification. The introduction of a new voluntary defined contribution pillar (“second pillar”) is a step in the right direction, which needs to be well communicated and accompanied by regulatory measures to allow the public to make informed choices. In particular, consideration should be given to establishing a central clearing house in order to keep fees low. Payouts in the form of annuities and life-cycle investment strategies should be the default options.
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