EUROPE - The Dutch parliament has agreed to bring forward to the year 2019 an incremental increase of the official retirement age to 66, beginning with a one-month increase next year.

Subsequently, the pensionable age will be increased to 67 by the year 2024, when additional increases will be linked to life expectancy.

According to the Pensions Agreement between the social partners and the government, the current retirement age of 65 was to increase to 66 in 2020 and 67 in 2025.

The new measures are part of a package of spending cuts aimed at lowering the budget deficit to 3%.

They were agreed by the coalition partners of the collapsed government - VVD and CDA - as well as left-of-centre party GroenLinks, liberal democrat party D66 and right-of-centre party ChristenUnie.

Together, the parties represent 77 of the 150 seats in parliament. During a parliamentary debate held on Thursday, however, the two-seat right-of-centre party SGP and independent MP Hero Brinkman also pledged support for the agreed spending cuts.

The new coalition also agreed to reduce tax-facilitated pension accrual in 2014, as well as the budget for employees who continue working after the official retirement age.

In addition, the budget for increasing the number of older workers in the workforce will be frozen.

Dutch labour unions have fiercely contested the bringing forward of retirement-age increases, which they see as a breach of the Pensions Agreement.

Corrie van Brenk, interim chairwoman at AbvaKabo, the largest civil service union, said: "Early retired workers in hard jobs, such as ambulance staff and firemen, are facing a shortfall of their state pension AOW of 6.5% or even 13%."

In a first response to the spending cuts deal, the Pension Federation noted that the agreed step-by-step increase of the retirement age would have important consequences for the implementation of pension plans, as additional pensions needed to be recalculated continuously following the changes in the retirement age.

However, the employers organisations MKB, VNO-NCW and LTO have praised the package of cuts, noting that the measures secure the financial stability of the Netherlands and contribute to the recovery of its international image.

The agreement on spending cuts will stand at least until a new government takes the reins after the elections on 12 September, according to outgoing prime minister Mark Rutte.

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