PMT scheme raises pre-pension age (Corrected)
(Corrects name of pension fund) NETHERLANDS – Kleinmetaal (middle and small companies) have been confronted by their pension fund, the Pension Fund for Metalworking and Mechanical Engineering, or Pensioenfonds Metaal en Techniek, which has raised the pre-pension age to 60 from 55 previously in a bid to save two billion euros in extra costs.
Unions agreed to the shift “with pain in their heart”. The move represents the first casualty of the Dutch government’s proposal to cut the pre-pension arrangements. The decision will mean around 340,000 employees at 31,000 companies having to work longer, without having the choice to retire early at 55.
The decision of the pension fund – which it blamed on the government - has been made due to the potentially disastrous effects of increased early retirement of their subscribers the coming months.
According to the pension fund, the need to change the date of early retirement was forced upon them by the fact that the pension arrangements of the fund were not set up for an immediate mass early retirement before the age of 60.
According to Bert van de Belt, director of the pension fund, in a statement to the Dutch press, if no action was taken a wave of new pensioners would have threatened our existence. A drastic change of strategy was needed, van de Belt said.
PME said that if the change hadn’t happened immediately, then it would have been confronted by an extra pension cost of two billion euros in 2004.
This would have caused severe financial stress on the fund, forcing it not only to increase overall pension contributions but also to lower or even end indexation directly.
Nathalie Koopmans, spokeswoman of FNV Bondgenoten, the largest Dutch trade union, said that the unions had agreed “with pain in their heart”, to support the decision.
She blamed the government plans for the decision, stating that the plans of the Balkenende government could have resulted in extreme high early pension subscriptions the next months. “We could not do anything else.” she said. In principle, the trade unions are still against later retirement, but the government currently has the upper hand.
The trade unions however will still support the fact that employees have the choice when to take retirement. The current rigorous approach of the Dutch government will not only lead to growing discrepancies between funds, but also will result in increased social unrest, the trade unions stated.
The new date has been implemented immediately, effective from July 1, 2004.