NETHERLANDS - Restoring the financial health of Dutch pension funds will require an average benefits cut of 8% and a two-year increase of the retirement age to 67, Aart-Jan de Geus has argued.

Speaking at the annual congress of lobbying organisation OPF, the deputy secretary-general of the Organisation for Economic Co-ordination and Development (OECD) said this "mixed scenario" was the most realistic when compared with other stand-alone solutions, such as a 17% benefits cut, a 50% decrease of indexation, a 30% premiums rise or a four-year rise of the retirement age.

De Geus - a former Dutch social affairs minister - underlined the importance of expertise, taking difficult decisions and consolidation when trying tackling pension funds' present problems.

He said the most important international lesson learned from the financial crisis so far was that paritarian representation on pension funds' boards might always come second to the boards' expertise.

"This is because the challenges faced by pension funds are more important than the direct interests of groups of participants," he said.

He suggested introducing an online "trustee tool", as is already operational in the UK, as an additional way to increase the expertise of board members.

Borrowing from Australia's principle of 'fit and proper', De Geus recommended consolidating Dutch pension funds in a "bottom-up process", with about 100 pension funds a "very realistic outcome".