NETHERLANDS - Dutch banks will be competing with insurers from January to offer tax-friendly savings products as additional pensions plans.
The Dutch Senate has decided to back the private member's bill, tabled by the MPs Staf Depla of labour party PvdA and Stef Blok of liberal party VVD.
So far, only savings for deferred annuities sold through insurers has been subject to tax allowances but MPs claimed this gives a competitive advantage to insurers, resulting in a monopoly and higher fees.
Depla and Blok's aim is to target these products at employees with a pension gap and the self-employed, who need to save additional sums towards their old-age pensions.
"At the moment, they are forced to deal with insurers, whose fees are high and non-transparent," said the two MPs.
Depla claims banks are able to sell pension products - known as lijfrente - at a cost of 1%, compared with the 7% charged by insurers.
However, the Senate still has to vote on a motion from the Christian Democrat (CDA) senator Ria Vedder about the proposed coverage of costs of the private members' bill.
Earlier, the House of Commons (Tweede Kamer) had decided to find, in part, the necessary funds by limiting the tax-deductibility of deferred annuities for self-employed by almost one-third to just over €103,000. However, the CDA wants the government to find a way to keep this tax-discount at its present.
The consumers organisation Consumentenbond - which has over half a million members - is jubilant about the new legislation.
"We have been fighting for the banks to be allowed to offer tax-friendly saving since 1980," said spokeswoman Barbara den Uijl.
"We expect lower costs and more transparency through competition with insurers and, most of all, freedom of choice for the consumers. Traditionally, banks have charged less than insurers," she pointed out.
In response, Hennie Zoontjes, of the Dutch Association of Insurers (VvV), commented: "We are not afraid of competition. Banks cannot offer cheaper products, because they must meet the same legal requirements as insurers.
"We hope that the government does not find the alternative coverage by again letting others pay for tax-friendly bank saving, as it has already done by raising the tax on all kinds of insurances," he added.
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