A Dutch advisory board has suggested that pensions red tape for flexible workers and the self-employed could be cut significantly through improved communication, the merger of sectors, and automatic value transfer for small pension claims.
In a letter to Jetta Klijnsma, state secretary at the Ministry of Social Affairs, the board (Actal) recommended widening sectors with single pension arrangements in order to limit the number of value transfers and redemptions of pension rights.
Actal said it reached its conclusions – based on a survey by KPMG – following signals from flexible workers and companies about the increasing complexity of pension rules and the lack of insight into accrued pension claims.
It pointed out that flexible workers and the self-employed already made up 31% of the working population, and that this percentage was still increasing.
According to Actal, red tape could also be reduced through a mandatory value transfer for pension claims of less than €451 a year, which currently cannot be redeemed.
It recommended allowing pension providers to redeem, or write off, pension amounts of a few euros as soon as somebody leaves a job.
This would decrease costs and positively affect pension contributions, as well as investment returns, it argued.
Actal also recommended showing all first and second-pillar information in a single digital portal – the current Pensions Register – to cut back the overabundance of information provision.
The advisory board also suggested an adjustment of legislation to allow for a better match between the contributions of the 48,000 self-employed, who still participate in mandatory industry-wide schemes, and their fluctuating income.
Actal stressed that its recommendations would require not only legal changes but the commitment of pension funds and insurers.
The Pensions Federation said it could not yet respond to Actal’s recommendations.