Dutch workers should be offered the option to save for a more generous state pension to avoid dependency on pension funds, according to Dutch experts.
Writing in Dutch daily newspaper De Telegraaf, pensions law professor Hans van Meerten, Charles Verhoef, chair of self-employed workers’ lobby group Zelfstandigen Bouw, and consultant John Westerbrink argued that this would be an affordable way for additional pension saving without individuals being forced to take on more investment risk.
“People who save a certain amount every month could know exactly how much their benefits would be in 30 years’ time,” they explained.
In the authors’ view, purchasing additional benefits through the Netherlands’ state pension system – known as AOW – must be offered as an alternative to accruing a pension with a pension fund.
They were not keen on a proposal put forward by the Social and Economic Council (SER) – which represents employers and trade unions – which was recently leaked as a “concept agreement” between companies and workers.
Unions subsequently denied that the leaked document was the final version of a proposal for a new pensions contract.
“People pay a monthly contribution but don’t know at all what they’ll get at the end of the day,” Verhoef told De Telegraaf.
The experts acknowledged that money paid for additional AOW benefits could ultimately generate a lower pension than premiums paid into a pension fund.
However, Verhoef emphasised that people valued certainty, “which pension funds and insurers don’t offer”. He added that trust in Dutch pension funds had “crumbled” after years of low or no inflation-linked payments and the looming threat of benefit reductions in some cases.
Westerbrink added that workers in countries such as France and Germany already had the option to save for a higher state pension.
“It is about time that social affairs minister Wouter Koolmees looks further than just pension funds,” he said.