Saturday 08 August 2020

Questions remain over pension changes as MPs back Koolmees plan

The FNV backed the changes after the retirement age was frozen at 67. Photo: DutchNews.nl

Sweeping changes to the pension system have been backed by MPs, but questions remain about how the reforms will work in practice.

Social affairs minister Wouter Koolmees secured the support of all four coalition parties as well as Labour (PvdA), GroenLinks and the orthodox Protestant party SGP on Tuesday evening. Last week delegates of the largest Dutch trade union, FNV, backed the measures.

The new system, which emerged from nearly 10 years of negotiations, replaces the fixed-rate pension with one tied to stock market prices, meaning pensioners will not know how much they stand to receive until they retire.

The rule that all payments made during a worker’s career count equally towards their final pension is also being scrapped to reflect the reality that investments made in the early years have more time to grow in value. Under the old system workers receive 2% of the full state pension for every year they contribute.

The government says the reforms will safeguard pension funds for future generations, but opponents such as the Socialist Party and 50Plus have labelled it a ‘gamblers’ pension’.

Labour and GroenLinks backed the changes after securing a number of concessions, including capping the retirement age at 67 in the short term and allowing people with physically demanding jobs to retire three years earlier.

Transition

MPs focused in Tuesday’s debate on the implementation of the plans and the transition from the new system to the old. A compensation mechanism to prevent workers aged between 35 and 55 losing out in the transition from the old system to the new one.

CDA MP Pieter Omtzigt called for two committee sessions to be scheduled in the autumn where MPs can question experts on the impact of the new system.

Omtzigt said €1500 billion would be needed to cover the costs of the transition. ‘An astronomic sum. A four-minute debate with no hearings is not the kind of detailed assessment that I’m proposing,’ he said.

Thank you for donating to DutchNews.nl

The DutchNews.nl team would like to thank all the generous readers who have made a donation in recent weeks. Your financial support has helped us to expand our coverage of the coronavirus crisis into the evenings and weekends and make sure you are kept up to date with the latest developments.

DutchNews.nl has been free for 14 years, but without the financial backing of our readers, we would not be able to provide you with fair and accurate news and features about all things Dutch. Your contributions make this possible.

If you have not yet made a donation, but would like to, you can do so via Ideal, credit card or Paypal.