The Rise and Fall of the Dutch Savings Schemes

Dutch savings schemes are a case in point. In 1994, Dutch employees got the opportunity to save tax free to build up financial assets in the voluntary Salary Savings Scheme (SSS). From 2006, they could also choose to save in the innovative Life Course Savings Scheme that offered them the opportunity to save tax free to finance periods of unpaid leave. In 2010 the Rutte I government decided to combine the schemes into the so-called Vitality Scheme, aimed at giving employees and entrepreneurs more freedom and responsibility to shape their career themselves. However, in 2012 the new Rutte II government decided to cut spending and not to introduce the Vitality Scheme. In this paper we look back to draw policy lessons from the Dutch experience. The design of the three savings schemes will be discussed and empirical evidence regarding participation of Dutch civil servants in the Life Course Savings Scheme and the Salary Savings Scheme is presented. This allows us to put forward recommendations for an effective fiscally facilitated individualised savings scheme.