New pension law needs two-third majority, professors say

Pensioners on a bench

Three constitutional law professors have written to the senate warning that new pension legislation, which is set to be voted on on Tuesday evening, does not meet the terms of the constitution.

Wim Voermans, Paul Bovend’Eert and Joost Sillen argue that under the terms of the constitution, all votes which affect the income of MPs must be won by a two-thirds majority in both houses of parliament.

The legislation will change the way company pensions are structured and will also impact the income of MPs and former MPs when they retire, the professors say. 

Pensions minister Carola Schouten had earlier brushed off similar criticism from the Council of State and the lower house of parliament, arguing that the change is technical and the constitution does not apply. 

A spokesman for the minister has said she has not changed her opinion since then.

The new pension law was adopted by a majority of MPs but not by two-thirds. 

The professors were asked for their opinion by senators who oppose the shake-up, including Tiny Kox (SP) and Martin van Rooijen (50Plus). They have said they will raise the professors’ position during the debate.  The debate is due to start at 10 am with the vote at just before 9.30 pm. 

The vote comes on the day that provincial councillors vote on the make-up of the new senate, in which the pro-farmers’ BBB is set to become the biggest grouping. The new-look upper house will sit for the first time on June 13. 

Last week, Schouten agreed to delay the start date for a new pension system by one year to 2028, in an effort to keep dissident senators on board.

16 years

The aim of the legislation, first mooted 16 years ago, is to make corporate pensions more sustainable. If the new system comes into full operation in 2028 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 on average (wage-related) contributions but on everyone paying the same.

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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