NETHERLANDS - Social partners and the Dutch government must focus on increasing the retirement age as a means of countering the effects of increasing longevity, a large number of experts have argued.

During a hearing of the select committee for social affairs, economist Sweder van Wijnbergen said: "The real risk is not inflation, but demographic developments and the financial markets."

He urged politicians to increase the pension age as soon as possible - by adding a month every year, for example, rather than waiting until 2019.

The government and the social partners have agreed to increase the official retirement age by one year to 66 in 2020 and to make additional increases dependent on longevity developments.

But Van Wijnbergen argued inflation was not the real threat, as this would be "approximately 2% for the next 10 years".

During the hearing, Theo Kocken, a risk management professor, supported increasing the pensionable age within five years, as an increase in 2020 would have a "limited impact" on pension funds' coverage ratios.

Jean Frijns, a professor of investment theory, and Roel Beetsma, a professor of macroeconomics, also stressed the urgency of increasing the retirement age.

Dick Sluimers, chief executive at the €250bn pension provider and asset manager APG, said an increase of the pension age would be needed to minimise the impact of increasing longevity.

Both Van Wijnbergen and his fellow economist Lans Bovenberg also underlined the importance of an increased labour participation of older workers.

Van Wijnbergen said: "This is necessary in order to support the effect of an increase of the retirement age of the state pension AOW."
 

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