This paper addresses two policy questions with respect to public defined benefit (DB) pension schemes: Firstly, does a funded DB pension scheme increase welfare? In other words: do the gains from intergenerational sharing of capital market risks outweigh the labour market distortions from...

Privatization of public pension schemes, partial or complete, is on the political agenda in many countries. In the Netherlands, the discussion focuses on second-pillar pension schemes. Although these schemes are funded, they feature intergenerational risk sharing. This paper documents the...