NETHERLANDS – Dutch employers and workers must seriously consider terminating early retirement schemes (VPL) in favour of improving actual pensions, the employers association AWVN has suggested.
Leon Mooijman, head of pensions advice at AWVN, said: "Nowadays, we all must continue working longer, whereas VPL plans have been initiated to facilitate early retirement. The VPL schemes were created in 2005 and 2006, when the financial conditions were quite different."
In the opinion of the employers, VPL assets would be better used to improve pensions, as well as for measures to keep workers in employment longer, Mooijman said.
He said the need for change had become more urgent since the government's decision to limit tax-facilitated pensions accrual.
Any adjustments to VPL schemes need to be agreed through collective labour agreements (CAOs) between employers and employees.
Mooijman estimated that 75% of all Dutch companies had VPL schemes.
As of the end of May, the €180m Dutch pension fund of supermarket chain Co-op terminated its VPL plan with immediate effect.
It said the regulator's announcement that a VPL would not be considered a pension but rather a "labour condition" – for which the social partners would be responsible – triggered its decision.
Bert Kok, the pension fund's director, said: "The scheme's board has asked the social partners' approval to add the existing €7m, which was available for VPL purposes, to the pension rights of the active participants."
The AWVN recently suggested employers in particular were footing the bill for increasing pensions costs.
It pointed out that the share of contributions paid by companies rose from 60% to 62% in 2012.
What is more, according to an AWVN survey, the employers' contributions increased from 14.7% to 16% of the pensionable salary on average, while workers' premiums rose from 8.87% to 9.19%.
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