Company pension premiums will go up by 30% over the next 15 years in order to meet worker expectations, a government commission set up to look at the effect of the credit crisis on pensions said on Wednesday.

The government cannot afford to wait to take action on corporate pensions until 2020 when the state pension age is due to be increased from 65 to 66, the commission, led by Leiden University professor Kees Goudswaard said.
The Dutch pension system has two elements: the state pension AOW, based on 50 years’ residency, and a corporate pension, based on length of service. The aim of the dual system is to provide pensioners with roughly 70% of their last earned salary on retirement.
In order to maintain that, premiums will have to go up from 13% of wage costs to 17% by 2020, the commission said. And that will add €25bn a year to the premium pressure on employers and workers.
Lower benefits
One solution could be to reduce corporate pension payouts or raise the retirement age, the commission said. And if unions and employers don’t want to cut payouts, they will have to accept the risk of pension setbacks.
The credit crisis cost the Netherlands’ private pension schemes some €120bn.
Social affairs minister Piet Hein Donner told the Financieele Dagblad in an initial reaction that ‘unions, employers and ministers have to take measures to ensure the certainty which pension premium payers expect’.
He will make a formal response before April 1.