Insurers call for single adjustment to Dutch pensions tax

NETHERLANDS - The tax adjustments for additional pensions saving should be made only once for the planned increase of the Dutch retirement age to 66 in 2020 and the expected further increase to 67 in 2025, according to insurers.

Rather than changing the tax regime on 1 January 2013 and again on 1 January 2015, the adjustment should only be aimed at a retirement age of 67 and be introduced on 1 January 2014, they argued.

A single adjustment would be best in terms of communication with clients and the implementation of the changes, according to insurers association VvV, which added that such an approach would most cost-effective.

Harold Herbert, director of the VvV, said: "These changes will have significant effects, as tens of thousands pension plans need adjusting."

In his opinion, insurers will need at least a year to account for all adjustments, once employers have established all actuarial, fiscal and legal changes.

"We estimate that the whole process will take at least two years, and therefore 1 January 2013 is no real option," he said.

The Dutch Pension Agreement mainly targets pensions at pension funds, as the social partners want to make pension plans more resilient against the effects of increasing longevity and financial market volatility.

Although insurers usually carry these risks, they assume that their clients also want to link their retirement age to their life expectancy, and that they want to seek a balance between certainty, ambition and costs, the VvV director argued.

"For this reason," he said, "employers and employees who aren't participating in a pension fund should also have the option for a new pension contract."

According to Herbert, communication and implementation - in terms of both arrangements and available time - as well as a level playing field in relation to pension funds, are crucial elements for future insured pension contracts.

Dutch insurers' pension assets now stand at about €100bn (out of a pensions asset total of €890bn), according to recent figures from regulator De Nederlandsche Bank.