PWRI, the €6bn pension fund for disabled workers in the Netherlands, has claimed new legislation aimed at directly employing handicapped workers in regular companies would cause it “considerable” financial damage.
It argued that the introduction of the Participation Act as of 1 January 2015 would mean an end to the influx of new participants into the pension fund.
During the reading of the bill in Parliament last week, Jetta Klijnsma, state secretary for Social Affairs, said she would not increase her initial offer for an annual €10m payment as of 2018 to compensate the scheme for increased costs.
As the age of its 100,000 active participants is already 47 on average, the lack of new participants will lead to a contribution increase from 28.2% of the pensionable salary to more than 40% in 2050, the scheme said.
It has calculated that the ageing effect on its population will require an additional €490m for cost-covering premiums until 2060, when the last participants pay their contributions.
PWRI suggested these extra costs would lower its coverage ratio by 8 percentage points.
Currently, the scheme’s funding is 108.2%.
According to Xander den Uyl, the scheme’s chairman, the government’s promised compensation, apart from being too little, will arrive three years too late.
“Our shortfall would still be €200m,” he said.
Frans Prins, the pension fund’s director, pointed out that Klijnsma would only pay the compensation if the social partners of employers and unions found a way to fill in the remaining shortfall.
He confirmed that the developments did not pose an immediate threat to the pension fund’s existence of the pension fund, adding that any rights cut would not be on the cards for some time.
He said the pension fund wanted to maintain its independence, as it provides tailor-made services – including with respect to communication – to its participants, who live four year less, on average, than the average Dutch worker.
PWRI has 100,000 active participants, 40,000 pensioners and 70,000 deferred members, affiliated with more than 100 workshops.