Stakeholders looking to pass buck on pension shortfalls
NETHERLANDS - Employers and employees in the Netherlands want the other party to foot the bill for the shortfalls at pension funds, according to a survey by pension consultant Montae and research bureau GfK Panel Services.
The survey found that most workers believe employers should raise their contribution when a pension fund runs into trouble, whereas employers advocate increasing the retirement age, as well as a premium increase for employees.
However, employers and employees agree that cutting already accrued and guaranteed pension benefits is the worst possible remedy against shortfalls at pension funds, the researchers concluded.
The question of which party is to bear the risks of the future pension system is a hot topic in the Netherlands, as employers and unions negotiate a general pension agreement that will lack the guarantees of the past.
The researchers found that decreasing pension benefits was considered unacceptable for more than 75% of workers, whereas 60% opposed a benefits cut during the accrual phase.
However, if pension arrangements have to be changed, employees can live with stopping the pension accrual for a pension income of more than €50,000, as well as limited guarantees above a pension income of €33,000, Montae and GfK found.
They added that employees would like a guaranteed pension and were willing to pay an additional 2% of their salary for this purpose.
However, workers prefer a less certain pension adjusted for inflation, rather than a guaranteed pension with compensation for inflation, the researchers said.