Dutch schemes should consider raising pensionable age 'ahead of schedule'
NETHERLANDS - Dutch pension funds should consider raising the pensionable age as early as next year as a means of improving their funding ratios, according to social affairs and labour minister Henk Kamp.
Speaking at a seminar in The Hague organised by the civil servants scheme ABP, Kamp said that, while the fiscal framework for occupational pension savings will be adjusted to increase the retirement age from 65 to 66 in 2013 and to 67 in 2015, "there are no legal restrictions that would prevent pension schemes and social partners from raising the pension age as early as 2012, and doing so might help the recovery of funding ratios".
Kamp said he expected sweeping pension reforms, including a new supervisory framework, to be signed into law by January 2014.
"But that does not mean that, in the meantime, you and I can sit back and relax," he said. "Pension funds must work hard to bring their funding ratios up to the required level, and one way to do that is by raising the retirement age."
At the ABP seminar, Kamp and the social partners - represented by Bernard Wientjes of employer association VNO-NCW and Agnes Jongerius of the federation of labour unions FNV - reiterated that intergenerational solidarity and a fair distribution of burdens and benefits remained the guiding principle and primary objective of the pension reforms.
In response to the recent 'Pensions Rebellion' by five youth branches of mainstream political parties, which have objected to the pension reform plans in the new Pensions Agreement, Kamp said he would "inform and consult" with the youth organisations and senior citizen groups to address their concerns.
Kamp, Jongerius and Wientjes stressed that clear and effective communication would be key to implementing the reforms.
Kamp added: "In collaboration with the pensions industry, social partners and the supervisory agencies, this coming spring, I intend to present a plan of action regarding communication of the new pension agreement."
Ideally, pension plan participants should be provided with a dashboard "similar to that of a car, which allows drivers to see at a glance how fast they are going and how much petrol they have left in the tank", Kamp said.
Similarly, a pension dashboard should show participants at a glance just how much they have accrued in terms of pension benefits and exactly what their retirement income will be, he said.
"And just as drivers are being told they use more petrol when they drive faster, participants should be made to understand they will earn lower returns if the investment policy is geared more toward security," he said.
According to Wientjes, the greatest challenge in terms of communication will be to convince people the new pension deal does not equate to a 'casino pension', as has been claimed the largest Dutch trade union, FNV Bondgenoten, which opposes the deal.
Jongerius added that the term 'casino pensions' may work well as a slogan, but does not accurately describe the new pension system.
Minister Kamp took exception to the term as well, saying: "If there were such a thing as a casino pension, the man who coined the term would in fact himself be running the casino.
"After all, the unions that oppose the pension deal serve on the trustee boards of 9 in 10 large pension schemes - so they are the ones who determine the investment policy."