Annemarie van Gaal: Opting in and out of pensions

Dutch pension funds could do with more supervision and should also give employers a break, writes Annemarie van Gaal

The resigned reactions to yet another floundering pension fund never cease to amaze me. It’s Smit Internationale’s turn this time. It has to cut back pension pay-outs by 4.2% in spite of a €30m contribution from Boskalis.

The board’s story is that the fund has become a so-called closed end fund since the take-over by Boskalis and that no new premiums will be coming in. Pull the other one. I think the board failed to react adequately and could have opted for an immediate transfer of the fund to an insurer.


These pension fund executives prefer to keep things as they are so they can keep fiddling with the knobs and keep their snouts in the trough while the hard-working people who paid into the fund for years are facing a cut in payments.

I wonder if our pension funds are being monitored sufficiently. The other day I asked Ronald Gerritse, chairman of the board at the Netherlands Authority for the Financial Markets (AFM), if this financial watchdog ever steps in if things go wrong at the pension funds. His answer was: ‘we monitor but we don’t decide’. According to Gerritse, pension fund regulations don’t ‘allow’ it.

Apparently the board of pension funds are allowed to let things slide and keep themselves in a job while participants are out of pocket.

People who read my features know that I think our pension system is unfair and not future-proof. I would argue for a completely different system of individual pensions which every citizen can add to, or opt out of, at will.


Employers, too, are suffering. Many entrepreneurs are on the verge of going under because of the heavy burden of monthly pension premiums for their employees. An entrepreneur usually doesn’t have a pension but he pays for them all the same and if things go pear-shaped he takes the blows.

If, in these economically difficult times, an entrepreneur fails to make pension payments for three months, his employees receive a letter from the pension fund in which it explains their boss is behind with his payments and this can affect their pensions. The pension funds and pension insurers say this letter is part of their ‘duty of care’ towards the employees of their client.

Well, that’s just lovely. You can take it from me that employers don’t enjoy defaulting on pension payments. They want to make their payments on time, especially those that concern their employees.


The entrepreneurs themselves don’t receive a copy of this letter to their staff and are unpleasantly surprised when their workers present themselves in their office, letter in hand. There has to be a better way. I propose, and this can also be part of the duty of care, that employers also get a letter, saying: ‘You have failed to make pension premium payments for your employees for three consecutive months. We know times are bad and we feel very sorry for you. We would like to point out that, should your financial situation warrant it, you can opt out of paying premiums. In the meantime, we shall continue your employees’ pensions free of premium. At such a time in the near future when your company results improve, you can opt in again. We wish you every success and hope we have been of service to you.’

Of course employees don’t like a break in their pension payments but they would like it even less if the company went under, taking their jobs and pensions with it.


Annemarie van Gaal is an entrepreneur and head of publishing company AM Media. She is also a writer and television personality





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