The Netherlands is about to launch a national debate on pensions. De Nationale Pensioendialoog, complete with corresponding website and town hall events across the country, will examine the fundamentals of the current system, with no subject off-limits, according to state secretary Jetta Klijnsma. 

The current focus remains on proposals for a new financial assessment framework (FTK), which is to be discussed by Parliament this autumn. These proposals consist of increased financial buffers, an extended recovery period and tighter rules for indexation. But, they no longer aim at a ‘real terms’ pensions contract that takes inflation into account. 

Parliament recently decided to limit the annual tax-facilitated pensions accrual from 2.15% to 1.875% of salary following the increase in the official retirement age from 65 to 67, and new legislation for pension fund governance took effect in July. Pensioners are now represented on schemes’ boards after funds opted for one of five new board models, and both internal supervision and interaction by participants has been improved.

What will be the focus of the debate?
Solidarity – The solidarity between different generations in a pension fund has come under fire. Younger employees argue that they pay proportionally more than their older colleagues under the current average contribution formula. This comes at their expense, as they are less likely to stay with the same employer. But solidarity is of course also about risk sharing.
•  Freedom of choice – How far should freedom of choice and tailor-made solutions for pension plans be extended, give that they could come at the expense of solidarity? Mandatory participation for both individual workers and company schemes has been one of the cornerstones of the pensions system.
•  Collectivity – A collective approach has also been been one of the pillars of the Dutch system, and is widely considered to be the most important cost-reducing factor. The government wants to know who is to join, and in which collective entity.
Responsibilities – As employers are increasingly shifting from DB to DC schemes – thereby transferring risks to their workers – the government has taken a role in shaping the pensions landscape and participants have become assertive on how future responsibilities should be shared between workers, employers and government.

In addition, new legislation for communication with participants is planned. The same goes for a new pensions vehicle – the ‘general pension fund’ (APF), which is to replace the short-lived API as a solution for company pension funds with defined benefit arrangements. The state secretary with responsibility for pensions, Jetta Klijnsma has said she will look into the option of using pension contributions to pay off a mortgage, as well as whether accrued pension rights can be bought out for the same purpose.

This autumn, the focus will change from short and medium-term improvements to the current system and to the long-term future of the system as a whole. Klijnsma says the planned consultation will seek a range of suggestions for improvement. Part of the process will be nationwide meetings, at which the government wants to road test ideas. 

A focal point for the debate, to be held between September and December this year, is a website – – scheduled to go live in August. It will not only provide insight into the government’s own thinking, but contain links to policy documents from important contributors to the dialogue and explain how citizens and interested bodies can participate. To facilitate the exchange of opinions, Klijnsma has presented definitions of the crucial concepts.

What key figures say ahead of the debate

•  Cees van der Veer, vice-chairman of the €325bn civil service scheme ABP, has underlined the need to address the key fundamental issues, such as the average contribution rate and the average pensions accrual, as well as the large and growing self-employed sector, many of whom are not contributing to a pension at all: “We must consider whether the current system of mandatory participation for employees still fits in the increasingly flexible labour market,” he has said.

•  Kees Goudswaard, professor of economics at Leiden University, has said that Dutch society is facing a choice between sharing pensions risk between the generations and the introduction of individual pension rights. He argues that intergenerational risk sharing would be restricted if financial shocks were spread out over time – as the new FTK prescribes – while increased freedom of choice would hamper risk sharing.

•  Joanne Kellermann, the DNB’s supervisory director for pension funds, has emphasised that clear ownership rights and “balanced” risk sharing must be part of the nationwide debate. She has also called for transparency, to create realistic expectations among participants for future pensions benefits. In her opinion, discussions should address the redistributive elements in the systems and any new system should retain a collective approach to keep costs down.

•  Dick Boeijen, actuary at the €169bn pensions provider PGGM, has called for capital-funded pensions accrual with collective risk sharing, rather than accrual under a DB or DC label. Speaking in a personal basis, he argues that only paid premiums, returns and risk management would then be required. The benefits would be simplicity, transparency and flexibility through a complete balance between payment and accrual. He concludes that the problem of average contribution and average accrual would then be eliminated.

Before the summer, the Ministry for Social Affairs held discussions with 13 groups, said not to be the “usual suspects” – journalists, consumers, sociologists and governance experts – to check that the relevant areas are up for debate. This autumn, the focus will be on the views of stakeholders, including not only pension funds, insurers, unions and employers, but also employees, the self employed and pensioners. 

Any conclusions will be included in the results, says John Landman, the civil servant with responsibility for the National Pensions Dialogue, and the nationwide sessions may result in additional platforms for specific groups. 

In November, meetings with experts are scheduled to streamline the outcome of the sessions, establishing common ground and drawing up conclusions. A series of expert meetings is also intended to formulate possible policy directions.

The results of the dialogue are to be laid down in a framework note, to be presented to Parliament next spring. This will include the conclusions of separate studies by the Social and Economic Council (SER) into the future of the pensions system, of the Social and Cultural Planning Bureau (SCP) into the pension wishes of consumers as well as a study of the Netherlands Bureau for Economic Policy Analyses (CPB) into foreign pensions systems. 

A nationwide debate