Dutch giants slam reform plans
The two largest Dutch pension funds and the OPF and VB associations have roundly criticised the Dutch government’s pension-reform plans.
Their comments follow the scrapping of tax breaks for early retirement and pre-pension schemes announced by the government in its 2004 budget. The moves are an attempt to encourage workers to remain in the labour market for longer.
The E48.8bn healthcare fund PGGM says the plans “have not been formulated with sufficient care”.
“By abolishing tax relief for early retirement and pre-pension contributions, the government has demonstrated its lack of regard for the efforts made by the healthcare sector,” PGGM says. The Zeist-based fund said that a one-off advance tax on early retirement benefits starting after 1 January 2005 was “unreasonable and inequitable”. It said that more than 30,000 of its members would be seriously disadvantaged.
PGGM says workers in the healthcare sector need to be flexible about when they retire.
The E142bn civil service fund Stichting Pensioenfonds ABP, Europe’s largest pension plan, says the proposals were “too rigorous, too fast”. It said the 1 January 2005 deadline does not give employers and employees enough time.
The company pension fund association, the Stichting voor Ondernemingspensioenfondsen, says it sees large problems with the implementation of the tax proposals. The OPF said that pension schemes will become even more complex as a result. It has written to members of Parliament urging them to reject the plans.
The Dutch Association of Industry-wide Pension Funds, the Vereniging van Bedrijfstakpensioenfondsen, or VB, says the proposals take from everyone who had saved for early retirement. It foresees problems with the communication and the implementation of the changes.
Dutch bank ABN Amro says it is not convinced by the government’s policy. “The arguments to substantiate the expected effects of this policy are weak.”