NETHERLANDS - The Dutch Cabinet has endorsed the proposal of social affairs minister Henk Kamp to raise the official retirement age for the state pension AOW from 65 to 66 in 2020.

The bill that will be submitted to parliament also provides for a parallel adjustment of the tax facilitation for second-pillar pensions.

In addition, the Cabinet wants to increase the period during which a full pension can be accrued from 35 years to 40 through a decrease of the yearly accrual percentage by 0.25%.

As of 2013, workers in final salary schemes will accrue no more than 1.75% a year for their future pension, while employees in average salary arrangements will build up a maximum of 2% a year.

According to the government, raising the AOW age is necessary, as the current ratio of four workers for each pensioner is expected to halve to two workers for each pensioner by 2040.

During the same period, the costs of the AOW are expected to grow from €30bn to €50bn a year, according to the government.

But FNV, the largest union federation, said Kamp's proposal was not enough.

Chairwoman Agnes Jongerius said: "We support a flexible AOW that allows workers to retire when they want. Moreover, we want the AOW benefits to be raised, and following the salary index."

According to the FNV, a decrease of the accrual percentage is not sensible, as it will  "decrease the pension target by 13%".

The social partners of employers and employees are still negotiating a final Pension Agreement.

Jongerius said she expected the minister to stick to his earlier promise to adjust his bill when the social partners had worked out a new pension contract.

Meanwhile, the pension supervisor De Nederlandsche Bank (DNB) has appointed Erik Van Houwelingen as administrator at the occupation pension fund for dentists and dentist-specialists SPT, after its occupational pension association sacked the scheme's board.

Van Houwelingen - a member of the executive board at Aegon Netherlands - will replace the scheme's board for six months, the DNB said.