Trade unions and the Pensioenfederatie have criticised plans by political parties that could incentivise workers to save less for their pension. The Pensioenfederatie, the association for pension funds in the Netherlands, has warned the plans will also lead to a delay in the planned switch to defined contribution (DC) arrangements, currently foreseen for 2026.

Liberal coalition partners VVD and D66 propose to make pension savings voluntary for annual incomes above €60,000 in order to increase the freedom of choice for workers. Some other parties, including Christian parties ChristenUnie and SGP and socialist party SP, want to lower the income threshold (currently €112,000) that exempt pension contributions from income tax to €80,000 or lower.

“These proposals are not in line with the consultation on the new pension law,” a Pensioenfederatie spokesperson commented.

“The draft law promises that fiscal arrangements will remain unchanged in this regard. Reducing the threshold for tax exemption would lead to fresh discussions, undoubtedly resulting in a delay in the implementation of the pension changes,” the spokesperson said.

Ruud Stegers, president of civil service trade union VCP, called the proposed changes “extremely unwise”. He said: “Making pension contributions partly voluntary is a plan that has not been thought through and will deliver little in terms of tax revenue. In practice workers will find it difficult to decide on this kind of financial matters. Pensions are a complex thing. There’s therefore a real risk that workers will only discover upon retirement that their income falls much more than they had expected.”

The proposals by the political parties were not part of their election manifestos but were only uncovered once the central planning bureau CPB had calculated the effects of the parties’ plans on state finances.

“I don’t understand why such important matters only emerge at this late stage,” he said. Parliamentary elections in the Netherlands take place on 15-17 March.

Stegers warned the measure would hit a large number of workers. “It would involve all those who earn more than twice the mean salary. And for part-timers the measure will apply too.”

Tuur Elzinga, executive of the country’s largest trade union FNV who’s currently campaigning to become the organisation’s new president, is also against plans to reduce pension accumulation for higher earners in any way.

He said he wants to prevent higher and higher middle class incomes to “partly fall outside the scope of pension funds”, as this could result in the interests of different income groups within pension schemes diverging.

Patrick Fey of Christian union CNV is also critical as the proposals could result in savers accumulating much lower pensions. “It will bring in a lot of revenue for the government on the short term, but there’s also a bill to be paid many years later.”

Interestingly, employers did not immediately dismiss the politicians’ plans to make pension accumulation partly voluntary. Pensions secretary Jurre de Haan of VNO-NCW said the employers are still studying political parties’ proposals.

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