STAR urges changes to new pension law
NETHERLANDS – The Dutch Labour Foundation (STAR) has written to the parliamentary social affairs committee urging that changes be made to the government’s proposed pension bill.
The draft is to be debated in parliament in the spring and is expected to come into force at the beginning of 2007. The social affairs committee is to begin hearings with interested parties within the coming weeks.
STAR, a national consultative body consisting of the three trade union federations and three employers’ associations, was critical of the lack of information on the practical aspects of the new law.
It noted that the text of the general measures of management/policy (AMvBs) was still unpublished and said that pension organisations and funds would need to be able to offer advice on the AMvBs measures before implementation.
It noted that the legislation did not include mention of the collective DC schemes that are a growing feature of the pensions system, saying that they need to be included to allow the DNB, the pensions regulator, an opportunity to support the new arrangements.
It said that the bill proposed a reduction to 21 of the age at which it would be possible to begin pension contributions and urged the government to consider introducing sector-specific pension contribution ages.
It added that the inclusion in a pension system of part-time workers, like those in the various service sector occupations, would lead to an exponential increase in administrative costs and bureaucracy.
The letter said the one-year recovery period that the bill foresees allowing pension funds whose coverage ratio falls below 105% was unfeasible and demanded that it be reconsidered. Such a recovery in only one year could only be achieved by taking draconian measures, it charged.
It also rejected the current strict interpretation of risk-aversion, saying that the current DNB-supported strategy leads to lower investment yields which will result in lower pensions in the long run.