The Dutch pension agreement, paving the way for a change from a defined benefit to defined contribution-type system, was concluded in the pre-COVID summer of 2019. But it is still waiting to be implemented, with the delay blamed on the protracted negotiations following Dutch parliamentary elections in March 2021.
Even though the governing coalition retained its majority, it took Dutch political leaders more than nine months to form a new government. As a result, the draft pension law implementing the reforms was only sent to the government’s advisory council in December.
The new pension minister, Carola Schouten, told parliament in February that she hopes to send the bill to parliament by 1 April. As the new law must come into effect on 1 January 2023, there is little time to waste, especially in light of the fact that the pension accord had passed on several hot pension potatoes to lawmakers.
A concept version of the pension law that was circulated in 2020 drew 800 responses from pension funds, consultants and all sorts of interest groups. Some of the most controversial issues still on the table include the question of how to convert existing DB rights into a DC or collective DC framework, and whether to allow individual members to object to any conversion decision. Another concerns the differences between the two contract types: the ‘solidarity’ or collective version and the flexible DC arrangements.
Today’s record high inflation could help shore up support for the system change, noted minister Schouten. “I think the main boon of the new pension law can be that pensions can be indexed faster,” she told parliament. Let’s hope for her that this prospect can convince politicians to vote the law through. Schouten will need all her political skills to make that happen, not least because she will need at least some of the opposition on her side.
Tjibbe Hoekstra
Netherlands Correspondent
tjibbe.hoekstra@ipe.com
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