NETHERLANDS – Employees with a standard salary of €30,000 are to receive up to 30% less pension following the measures announced in the new government's colaition agreement, Dutch pensions provider Syntrus Achmea has claimed.
The decrease will be even larger for those with incomes over €100,000, according to the pensions provider.
The new cabinet of Liberal party (VVD) and Labour party (PvdA) said it would decrease the current yearly tax-free pension accrual from 2.25% to 1.75%, and cap tax-free accrual at an income of €100,000.
Additionally, the new government said it would increase the contribution of pensioners to the state pension (AOW).
For its survey, Syntrus Achmea took the net replacement ratio into account. In 2011, the OECD estimated the replacement ratio for standard incomes in the Netherlands at approximately 100%.
As pensions were increasingly based on the average salary rather than final salary the net replacement ratio would drop to 84%, according the pensions provider.
"The announced cabinet measures will cause a further decrease to 58%, which means an additional drop of 30%," it argued.
"As a result, a young employee on a standard salary who just commenced accruing a pension would ultimately receive 58% of his average salary as a pension, which is 40% less than the employee who retired in 2011."
The company indicated that it had based its analysis on a scenario of a recovering economy and pension funds being able to offer indexation due to stronger coverage ratios.
Without recovery, the net replacement ratio would fall below even 58%, it noted.
Earlier, the €274bn civil service scheme ABP suggested that the planned decrease of the accrual rate will lead to approximately 20% less pension over a 40-year period.
Moreover, the government plan to cap the tax-free accrual at an income of €100,000, would come at the expense of the collective approach of the Dutch pensions system, ABP stressed.
Elsewhere, the union federation CNV predicted that young workers will accrue up to 22% less pension following the announced decrease of the tax allowance.