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New Dutch pension system 'to be delayed until after elections'

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The Social and Economic Council (SER) is unlikely to come up with the long-awaited blueprint for a new pensions system ahead of the elections for parliament on 15 March, according to Dutch financial news daily Het Financieele Dagblad (FD).

The FD quoted “insiders” as saying that the representatives of employers and workers in the SER aimed to present their plan for a new pensions contract ahead of formation talks for a new cabinet.

This way they aimed to prevent a new government from developing plans for a new system that aren’t aligned with the sector’s views, according to the paper.

Based on recent polls, a new coalition would need the co-operation of four, and possibly even five, political parties – all of which have different views on pensions.

The SER has been assessing a new pensions contract for three years, and is currently assessing two alternatives, comprising a target contract and individual pensions accrual and both with some degree of collective risk-sharing.

Although the Pensions Federation – the trade body for the Netherlands’ pension funds – has concluded that both variants would be potentially viable, it said additional research for improvements was needed.

According to the FD’s sources, however, the debate within the SER is still ongoing and many decisions still need to be taken.

Among the hurdles is the fact that the unions don’t like the concept of individual pensions accrual. Opinions also differ on the degree of risk-sharing with the varying effects on pensions accrual and workers’ generations.

Another tricky issue is the transition to a new pensions system. The costs of replacing the current average pensions accrual with an age-related “degressive” one, as the current cabinet wants, are estimated at up to €100bn.

Corien Wortmann-Kool, chair of the €382bn civil service scheme ABP, recently expressed the sense of urgency in the sector by stressing that the discussions should not get bogged down in a tug of war about details.

“Rather an [actual] eight out of ten than a theoretical nine, which is unlikely to be scored,” she said.

“It is important to come up with a framework now and do the work under the bonnet later,” echoed Kees Goudswaard, chairman of the SER’s pensions committee.

Meanwhile, calls have started from within the pensions sector to keep the current system, albeit with improvements.

Albert Akkerman, former chief executive of the €19bn pensions provider and asset manager SPF Beheer, noted that “time and time again, we have seen that new alternatives are not really better than the current system”.

In an opinion piece in IPE sister publication Pensioen Pro, he argued that a new system wouldn’t increase pensions.

Akkerman said that, among other things, participants needed convincing that a pension was no guarantee but a target, and to increase the options for pensions saving for the more than 1m self-employed.

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