Wouter Koolmees, the new Dutch minister for social affairs, has urged employers and workers to have agreed a framework for a new pensions system by early next year.
Speaking on a congress in The Hague – organised by pensions thinktank Netspar, the Pensions Federation and the insurers’ association – he said that the time of “sellotape and plasters” had passed, and that the pensions system had to be “fundamentally strengthened and renewed”.
However, the minister declined to say whether the government would enforce its own plans if the various players failed to reach an accord. Employers and employees have been discussing a new pensions contract for several years in the Social and Economic Council (SER).
Koolmees made it clear that an agreement about the main features of a new pensions system was crucial to enable the government to prepare necessary legislation. The coalition accord stipulates that the implementation of a new pensions system is to start in 2020.
However, several players – including the Pensions Federation, the chairman of the dedicated SER committee and the unions – have already indicated that it would be very difficult to meet this schedule.
The minister said that he was looking forward to the SER’s final advice, adding that he really valued its recommendations, because broad public support was vital.
The four coalition partners have indicated that they favoured new arrangements comprising individual pensions accrual combined with collective risk-sharing, including a financial buffer, while keeping mandatory participation.
The government also said that it wanted to replace the current average pensions accrual with an age-related degressive one, to prevent young workers subsidising their older colleagues.
The FNV, the largest union, however, has insisted that workers should be properly compensated for the abolishment of the average accrual.
It also wants the envisaged buffer fund to be able to turn negative temporarily during times of economic headwind, in order to keep up the principle of solidarity between participants. This is contrary to the wishes of the government and the supervisor DNB.
That said, Willem Noordman, the FNV’s head of pensions, has suggested to IPE’s sister publication Pensioen Pro that the buffer principle could also be achieved through alternative means.
Speaking in the corridors of the congress, he argued that the impact of declining investment markets on pensions could be evened out over several years “through cancelling figures out against each other”.
In his opinion, pension funds could also deploy their investments “in clever ways” to spread the returns over time.
However, neither Noordman nor Gerard Riemen, director of the Pensions Federation, could explain how these alternative mechanisms were supposed to work exactly.
“Many people are looking into the issue now,” said Noordman.
Dutch insurers would prefer to see no financial buffers at all.
During the congress, Aegon’s pensions director Maarten van Edixhoven, speaking on behalf of insurers’ association VvV, described a buffer as “not transparent” and “a black box”.