NETHERLANDS - Pension fund bodies have warned the Dutch government that raising the age of the AOW state-led retirement system will not automatically lead to a recovery of pension funds' cover ratios or speed up indexation.

The pensions lobby groups issued their statement on the eve of parliamentary discussions about the Dutch cabinet's proposal to raise the age of the state pension AOW - the law governing the Dutch pensions system - in two steps from 65 to 67 by 2025.

Part of the cabinet's plan is also to raise the second and third pillar pensions age in one step to 67 in 2020.

However, Frans Prins, director of OPF - which these days speaks in unison with the Association of Industry-wide Pension Funds (VB) and the Union of Occupation Pension Funds (UvB) - said: "Developments on cover ratio and indexation depend on agreements between employers and employees. Pension providers do not play a role in this."

According to Prins, many politicians mistakenly assume there is a direct link between the tax facility assisting the second pillar pensions regime and the financial position of pension funds.

"The government's proposals do not solve the present pension problems. It is the decisions on contributions, to be taken by the social partners, which affect cover ratios and perspectives for indexation," stressed the VB's Marjolein Zaal.

The position paper has also been reinforced by the Dutch Association of Insurers (VvV), as it claimed the cabinet has not taken the interests of self-employed into account.

The VvV argued that the government proposal to support employees in hard labour jobs - requiring employers to offer an alternative role after 30 years' services - would not be suitable for the self-employed.

"The many self-employed in hard labour [positions] would lose out, as they are their own employers and cannot be offered alternative jobs," noted Paul Koopman, spokesman for the VvV.

"The self-employed in hard labour roles are already very dependent on additional pension plans for a flexible retirement, and the cabinet's proposals threaten to limit their options further," he added.

In the opinion of the VvV, any decision by parliament must deliver equal treatment for both employees and the self-employed.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com