Netherlands roundup: Political youth branches push for reform proposals
Dutch political youth organisations have called for the government to break the deadlock on pensions reform and come up with proposals itself.
During a networking meeting organised by PwC and the Dutch Association of Insurers (VvV), the youth branches of the Netherlands’ four coalition partners expressed concern that the stalemate over a new pensions contract would continue, after the government’s deadline for an agreement passed without result.
The groups said they had found common ground on the introduction of mandatory pensions saving for all workers, including the self-employed (known as zzp’ers). This contradicted the position of the liberal VVD party and liberal democratic D66 party.
“General mandatory pensions saving will lead to equal competitive relations between all workers,” argued Daan Looij of the VVD’s youth branch JOVD.
The youth organisations said they favoured individual pensions accrual combined with “continued solidarity”.
They also supported the government’s decision to abolish the average pension contribution model “as this provided for a unilateral income transfer from younger to older workers”.
The organisations explained that they favoured progressive contributions – with younger workers paying in less than their older colleagues – rather than contributions reducing as workers got older.
In their joint declaration, the youth organisations also highlighted the need for clarity about who was entitled to what. They cited demographic changes in the Netherlands and said that the pensions system had become disconnected from the labour market.
They also argued that “the concept of opaque anonymous pension pots must disappear”.
The youth organisations also demanded “much freedom of choice”, ranging from the investment profile to the pensions provider, and from premium holidays to the ability to take a lump sum.
Women’s organisation demands legislation for board diversity
The Dutch government must introduce legislation to force pension funds to appoint at least 30% of women on their board if they keep on failing to adhere to a voluntary code for pension funds, a lobbying organisation has argued.
In an interview with IPE’s Dutch sister publication PensioenPro, Marjon Brandenbarg and Larissa Gabriëlse, chair and vice chair of Women in Institutional Pensions (Viip), argued that the legislator must come up with a legal quota of female trustees, if naming and shaming also failed.
They concluded that the ‘softly, softly’ approach hadn’t worked and further measures were necessary.
“The pensions sector has been trying to improve diversity for years,” said Brandenbarg. “At the moment, no more than 15% of trustees are female, while many pension funds don’t even have a single woman on their board.”
In her opinion, the code’s recommendation of at least one woman on a board was too little “as half of humankind comprises women”.
The Dutch government was already considering a 30% quota for female trustees at large companies, Brandenbarg said. “If this were to materialise, the pensions sector can’t stay behind,” she added.
Recently, D66 – one of the partners in the Netherlands’ coalition government – said it would initiate legislation for diversity rules for pension fund boards next year, if schemes failed to implement agreed changes voluntarily. Other parties are said to support the move.
Trade unions and AkzoNobel on collision course over extra contribution
Dutch trade unions are heading for a confrontation with chemicals giant AkzoNobel after the firm declined a demand for a one-off €400m additional contribution to its pension fund.
According to Dutch financial daily FD, the company has told unions that such a contribution to its defined contribution scheme was not allowed under international accounting rules.
FD reported that the unions had declined the company’s offer of a salary increase and one-off payments as part of a new collective labour agreement.
“This is to become war,” the newspaper quoted Erik de Vries, the FNV union’s trustee for the process industry, as saying.
The unions had based their demand for the additional contribution on the sale of AkzoNobel’s specialty chemicals arm to US private equity firm Carlyle, saying that they wanted the assets to be used to improve the pension fund’s financial position.
However, AkzoNobel had indicated it would channel most of the €7.5bn proceeds to its shareholders.
The company’s €5.3bn pension fund has a coverage ratio of 108.9%. It has an ageing membership and has only been able to grant limited inflation compensation.
The indexation in arrears for active participants is 7%, while its pensioners and deferred members have lost out on 14% of purchasing power.
In addition to the unions, the scheme’s board and its pensioners association have asked for the capital injection, albeit as a subordinated loan, to be paid off within 10 years.