NETHERLANDS - The new Dutch Pension Agreement increases risk for younger workers, while the compensation for this increase remains unclear, according to Casper van Ewijk, deputy head of the Netherlands Bureau for Economic Policy Analysis (CPB).

Speaking during the television programme Buitenhof on Sunday, Van Ewijk suggested that allowing pension funds to link the interest rate for discounting liabilities to predicted returns would also increase risk.

Earlier, Theo Kocken, director at Cardano Risk Management, said the agreement would cause younger workers to loose out on 20% of the value of pension assets, not to mention pay for the rise of the state pension AOW.

However, the Pension Federation - the umbrella group for pensions lobbying organisations VB, OPF and UvB - said it was satisfied with the central agreement, as it allows for "sustainable pensions, also for younger workers".

It underlined the importance of proper communication to pension funds' participants about the trade-off between risk-taking and the chances of indexation.

It also called for clarity about the options of merging existing and new pension rights into one new pension plan.

Because the responsibility of pension funds' boards will increase in the new system, clarity is also needed on how the responsibility will be shared between the boards and the social partners of employers and employees, the federation said.

In its opinion, a new and full pension contract cannot be introduced before 2014.

But Alternative for Trade Union (AVV) described the pension agreement as "useless" and said the promised yearly rise of the AOW benefits would ultimately compensate for the discount following early retirement.

The AVV, which mainly advocates the pension rights of younger workers, said it was opposing discounting liabilities based on expected returns, rather than on the "safe" forward curve, the current criterion.

In the opinion of the AVV, the 6.5m non-union members should also have a say in the elaboration of the new Pension Agreement.

The CSO, the umbrella body for lobbying organisations for the elderly, said it wanted pensioners to participate in the study into the possibility of merging existing and new pension rights into a new pension contract.

Employers must also be prepared to share the financial risks of their pension funds, according to the CSO.

The Dutch Association of Insurers (VvV) said the most important element of the agreement was that existing uncertainty for pension funds' participants was "finally acknowledged", adding that it was looking forward to discussing with the cabinet how to translate the agreement to the 20% of insured pension rights.

The large unions federation FNV said it would consult its 1.4m affiliated members through a referendum.

However, the FNV's largest union, Bondgenoten, said it still opposed the agreement, as it also wants employers to participate in their pension fund's risks.

Last week, the social partners and the cabinet announced an agreement on raising the official retirement age for the AOW to 66 in 2020 and to 67 in 2025.

However, early retirement remains an option, but against a loss of 6.5% of the AOW for each year.

Pension funds can decide individually on the degree of certainty offered, as well as the amount of uncertainty allowed, to help realise indexation ambitions.