Dutch company funds have adapted – central bank
NETHERLANDS - Most Dutch company pension funds seem to have adapted well to the changing environment, although industry-wide schemes however haven’t yet completed the recovery process, says the central bank.
The DNB, which is also the pensions regulator, surveyed 25 of the largest pension schemes – with combined assets of almost a third of the sector. It found that most of the company funds didn’t need to raise their premiums for this year. Some could even lower their members’ contributions.
According to the DNB, industry-wide schemes have started raising their premiums later and are increasing the contributions more gradually. The industry-wide schemes, which have a larger share within the sector, have raised their premiums by 10.7%. Company funds are facing 17.6% less premium income.
Based on the survey, pension contributions will rise on average by one percent of wages in 2005.
More than half of the schemes haven’t applied a complete indexation last year and even less haven’t planned a full indexation this year. “The negative impact however will be limited, because the price inflation and salary growth will be limited as well,” the DNB said.
Meanwhile, the employers’ organisation VNO-NCW will keep its early retirement scheme for its own 160 staff, who will still be able to stop working at 62, says Dutch daily De Volkskrant.
According to director Niek-Jan van Kesteren, the pensions agreement is the result of years of consultation with the VNO-NCW’s staff committee. “At the moment we are talking about a pension age of 65, and with that we are following government policy and our organisation’s view,” he explained.
Elsewhere, the daily Reformatorisch Dagblad says that many employers are shunning the new ‘levensloop’ scheme. Although they have much sympathy for setting aside part of the salary tax-free for taking paid leave later, employers are put off by the lack of flexibility.
During a debate organised by Delta Lloyd Group, it emerged that the scheme – meant as an alternative for prepension and early retirement scheme VUT - has only been applied in one out of forty collective agreements, or CAO’s, between employers and employees.
K. de Wildt, of employer’s organisation MKB-Nederland, spoke of his fears that workers will cash the money at any arbitrary moment. Representatives of the FNV union and Delta Lloyd were critical as well.