New Dutch pension legislation, which means corporate pensions vary in line with investment returns and life expectancy, is being called into question by three of the four parties in negotiations to form a new government.
The aim of the legislation, first mooted 16 years ago and approved by both houses of parliament, 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.
The reforms mean the economy will have more of an influence on payouts but the aim, the outgoing 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.
During Wednesday’s debate, the NSC, PVV and BBB all criticized parts of the law and said they wanted to amend it. NSC parliamentarian Agnes Joseph, a former actuary, told MPs the new system will endanger older pension rights and deny pensioners proper input.
In addition, aging pension fund IT systems are not equipped to cope with the changes and the Netherlands, she said, is not ready to deal with the impact of three million pensioners with a variable pension.
The BBB says people should be able to choose themselves whether or not to switch to the new system while the PVV wants to keep the current system with a more beneficial interest rate.
The law has been approved by both houses of parliament and “we accept that”, said BBB MP Henk Vermeer.” But that does not mean we won’t make an issue out of withdrawing it in the negotiations.” The VVD remains in favour of the legislation.
Caretaker pensions minister Carola Schouten, who spent years getting the legislation through parliament, warned that MPs should not create uncertainty. “The impact of your words should not be underestimated,” she said.
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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