Pensions sector rejects recovery term age proposal
NETHERLANDS - The Dutch pension sector has revealed it is far from enthusiastic about proposals from the ministry of Social Affairs which would give underfunded pension funds leeway on the deadline for recovery plans if they agree to raise the official retirement age of 65.
The issue was tabled during a recent meeting between representatives of Social Affairs’ minister Piet Hein Donner and the social partners who govern pension funds.
Gert Riphagen, spokesman for the department, confirmed to IPE: “We have discussed raising the retirement age as one of the possible ingredients for a recovery plan, together with options such as lowering benefits. However, in order to make recovery plans acceptable to DNB, we need to look at all options, and no solution will be painless,” he said.
In response, however, Gerard Verheij, pensions secretary of the large employers lobbying organisation VNO-NCW, said: “We still think that the retirement age should be raised, but it should not be linked to the term for recovery plans,” commented.
“In our opinion, a more flexible approach to the required recovery period of three years is paramount at the moment. Companies are now facing draconian measures in order to bring the cover ratio of their pension funds up to 105%,” he argued.
The Association of Industry-wide Pension Funds (VB) is also not happy with the minister’s suggestion, according to spokesman Gert Kloosterboer.
“Drawing up a recovery plan is first and foremost up to pension funds’ boards of employers and employees,” he stressed.
Martin van Oosten, spokesman for the union CNV, also added: “It is not right that the minister is trying to use the credit crisis as an excuse for raising the pensionable age. There are clear arrangements between cabinet and social partner not to raise the retirement age.”
The Foundation for Company Pension Funds (OPF) refrained from venting an opinion on the subject, as its director Frans Prins claimed it is a matter for the government and the social partners.
“However, to avoid problems in running schemes, any measures that are taken must be transparent, consistent and manageable, since problems can easily occur in the connection between additional pensions and the state pension AOW,” Prins explained.
The department for social affairs’ Riphagen stressed the age option was not being laid down as a condition for a longer recovery period than the three years where there is currently underfunding.
Pension funds with a cover ratio of less than 105% must submit a three-year recovery plan to pensions regulator De Nederlandsche Bank before 1 April.
The Dutch cabinet decided two years ago not to raise the official retirement age during its present term, which runs out at the end of 2010.
That said, minister Donner argued last year raising the pensionable age to at least 67 is necessary to counter the effects of population ageing.
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