Opposition parties GroenLinks and Labour have said they will withdraw their support for plans to reform the Dutch pension system if the government does not give assurances no pension will be cut next year.

A number of funds have warned that pension cuts are likely, including the giant civil service fund ABP, which is one of the biggest in the world.

Low interest rates mean that funds have to increase employee premiums because premiums alone do not cover the costs. And that means the funds have to cut payouts accordingly.

Unions, ministers, political parties and employers recently agreed plans to overhaul the Dutch pension fund system, which would reduce the pressure on funds to keep their assets topped up.

That new system is due to come into effect in 2022, meaning the funds have two years to bridge before they face more relaxed financial requirements.

Labour and GroenLinks argue that the government should act now to head off cuts which would be necessary under the old rules.

‘As long as there is a risk of cuts, there is no support for the pension reforms,’ one GroenLinks MP said. ‘This is putting a bomb under the pension agreement.’

The government needs the support of opposition parties to get approval for the reforms, which still have to be worked out in detail, in the upper house of parliament.