NETHERLANDS – Pension funds will not have to lower their contributions following the Cabinet's previous decision to decrease the tax-facilitated yearly pension accrual from 2.25% to 1.75%, as schemes must take the interest of all participants into account, according to Jetta Klijnsma, state secretary for Social Affairs.
Answering questions from Steven van Weyenberg, MP for the liberal democrats D66, Klijnsma said the premium level did not depend solely on the maximum allowed accrual rate.
"The social partners of employers and employees can also use the freed-up assets to improve other parts of their pension arrangements," she said. "For example, an underfunded pension fund must charge a premium that contributes to recovery."
Klijnsma said it was essentially up to a pension fund's board to decide on a balanced approach for all participants, adding that the Cabinet would monitor schemes' contribution policy closely.
In her letter to parliament, she confirmed that, following the decrease of the accrual rate as of 2015, the yearly accrued pensions would drop by approximately 18.5%.
However, in her opinion, such a decrease does not necessarily lead to "asset erosion" for future generations.
"A decreased pensions accrual in the second pillar will free up financial means to lessen mortgage debt, as well as to accrue assets through net income," she said.