THE NETHERLANDS - The popularity of the new ‘levensloop', or life-course, scheme, is fast waning, a survey has revealed.
Both employers and employees are becoming less interested in the tax-friendly scheme, "a not yet published market survey" by research bureau Intomart Gfk, according the daily Het Financieele Dagblad.
"Only 18% of workers thinks positively about the scheme, which is down 50% compared to two years ago," it said,
Willingness amongst employers to contribute to the levensloop has decreased from 21% to 7%. Especially within medium-sized and small businesses, there is much resistance, the survey indicated.
The most important reason for participating in the levensloop, is saving for early retirement, Intomart's survey reported found.
The uptake of the levensloop in 2006 was between 5% and 10%, other studies have shown. Most workers have stuck with the popular spaarloon, the existing tax-friendly savings scheme.
Earlier, Lans Bovenberg of pensions platform Netspar - one of the architects of the levensloop - and five other pensions experts pleaded for it to be changed into a fiscal scheme for loss of income.
In order to increase the popularity of the new levensloop, the tax discount on the eventual use of the levensloop balance and on the savings for the ‘spaarloon' scheme, should be replaced by a government contribution into the levensloop, the six argued.
"The problem is that spaarloon and levensloop can't be used at the same time during a tax year. People tend to stay with the scheme they are already familiar with," Bovenberg explained to IPE.
The experts propose a maximum government contribution of €300, proportional to a worker's deposit into the levensloop account.
Moreover, the present tax discount during parental leave should be replaced by an extra government contribution into the levensloop at the birth of each child, they said.
According to the pensions experts, the employers should be allowed to contribute to their workers' levensloop scheme as well. An extension of the levensloop into a scheme for loss of income, should provide for a participation by self-employed, they made clear.
The present levensloop scheme allows workers to save 12% of their salary tax-free, and use the balance to finance (taxed) intermediary leave, for example, parental leave, care leave and education. Although the scheme is meant to discourage early retirement, it still allows the balance to be used for this purpose.