Jetta Klijnsma, state secretary for the Dutch Ministry of Social Affairs, has vowed to put together concrete proposals for a new and sustainable pensions system within a year.
Speaking at a trustee seminar organised by regulator DNB, she said she aimed to flesh out the current proposal on the contours of a new system within the current Cabinet period, which expires in September 2016.
Klijnsma also said she planned to table her Bill, which will allow variable benefits following a defined contribution (DC) pension plan, before this Christmas.
At present, participants in DC plans must buy fixed annuities at retirement, which leads to low benefits as a consequence of low interest rates.
Helma Lodders, MP for the liberal party VVD, tabled initiative legislation with the same purpose in July.
During the seminar, Klijnsma suggested the new ‘general’ pension fund (APF) would come into force on 1 January 2016 only if the Cabinet received a “cheerful” response from the Council of State (RvS) about changes to her Bill.
The RvS is looking into an amendment – tabled by MPs and supported by the Lower House – that would allow industry-wide schemes merging via an APF to keep their assets ring-fenced.
However, the Cabinet has advised against the proposed changes, as it fears they would undermine mandatory involvement in industry-wide schemes.
Klijnsma said the abolition of average pension contribution and accrual – effective from 2020 – would commence with the phasing in of age-based accrual, adding that the average premium approach would remain in place for the time being.
Speaking at the same event, Frank Elderson, DNB director for the supervision of pension funds, conceded that trust in the pensions sector had not yet been restored in the Netherlands.
He said schemes’ boards could help turn the tide by making “sustainable” choices, taking action themselves and telling their participants the “full and honest story”.
He also warned boards against testing their limits, using the whole of their financial buffers or informing participants “selectively”.