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Government report recommends splitting ABP into separate schemes

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An inter-departmental study has concluded that pensions for the Dutch government should be decentralised and divided among separate vehicles for the various levels of government, education, the police and other public sectors.

The adjustment – meant to cut costs – could even lead to the division of the €356bn civil service scheme ABP, according to local financial news daily Het Financieele Dagblad (FD).

The FD said Ronald Plasterk, minister for Interior Affairs, sent the study to Parliament last week but that the report had already been completed last summer.

It said government employers, critical of the “lack of control” over ABP’s contributions, sparked the study, “as the centrally established premium is for 14 different governmental sectors, whereas salaries and collective labour agreements (CAOs) are individually negotiated for each group”.

The government cited “painful negotiations” over contributions to ABP over the past six months as an example, according to the paper.

This bargaining initially lead to a premium reduction, which was reversed soon afterwards, causing a financial setback of €245m for government employers.

The report recommended that all 14 sectors receive their own pension fund, or the ability to opt out of ABP.

It also proposed splitting ABP into three schemes – one for Cabinet-level government, one for the lower levels of government and one for education – as another alternative.

The latter would solve the issue of the solidarity contribution within ABP, the report said.

A third option was internal division within the civil service scheme, with ABP implementing different plans for the various sectors, with each able to decide its own arrangements individually, the FD said.

Most political parties have dismissed the report.

Roos Vermeij, MP for coalition partner PvdA, said the study’s main aim seemed to be to strengthen government employers’ negotiating position relative to unions.

Fellow coalition partner VVD said the break-up of ABP would be a matter for the unions and Dutch companies, not the government. 

The Christian Democrats (CDA), the Socialist Party (SP) and the Freedom Party (PVV) condemned the proposals.

Paul Ulenbelt and Machiel de Graaf – MPs for the SP and PVV, respectively – took pains to emphasise that the government’s policy was aimed at co-operation among pension funds, as well as consolidation.

The Liberal Democrats (D66), however, have seen the report in a more positive light.

The FD quoted MP Wouter Koolmees as saying that such an adjustment would be sensible, “as it would enable the various sectors to individually conclude arrangements such as higher pay against a lower pension, or the other way round”.

Readers' comments (1)

  • and at the same time, the English local government schemes are being merged to reduce costs

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