PvdA and GroenLinks clear the way to support pension reform

Henk Nijboer (PvdA) and Senna Maatoug (GroenLinks) during the debate. Photo: Sem van der Waal ANP
Henk Nijboer (PvdA) and Senna Maatoug (GroenLinks) during the debate. Photo: Sem van der Waal ANP

The Labour party and GroenLinks have withdrawn some of their objections to government plans to reform the pension system, clearing the way for the legislation to pass in the senate.

The two parties did use the last major debate on the changes in the lower house on Thursday night to renew their call for some amendments – including a government commitment to halve the number of people without a corporate pension to 450,000.

They also want to change the minimum age to start building up a pension to go down from 21 to 18 and to make sure agency staff start contributing earlier. There should also be a collective arrangement for freelancers, the two parties say.

PvdA MP Henk Nijboer said during the debate he was certain that the coalition partners would agree to the changes. ‘The new pension system solves a number of problems with the current system and will lead to improved pension expectations for young and old,’ he said.

The coalition does not control a majority of senate seats, and support from the opposition is crucial.

15 years

The aim of the legislation, first mooted 15 years ago, is to make corporate pensions more sustainable. If the new system comes into full operation in 2027 as planned, workers with a company pension scheme will no longer know in advance how much pension they get.

Instead, pensions will vary in line with investment returns and life expectancy, meaning the economy will have more of an influence on payouts. The aim of the reform, the government says, is to spread the burden of paying for pensions more fairly across the generations.

Corporate pensions will no longer be on based average (wage related) contributions but on everyone paying the same.

The government hopes to have the new legislation up and running by July 2023 with a transition period until 2027.

The Dutch pension system is currently based on three pillars – the state pension AOW, compulsory corporate pension schemes – either sector-wide or company based – and individual or private pension schemes.

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