NETHERLANDS - The Dutch pensions industry has breathed a collective sigh of relief as the FNV Federation of labour unions endorsed the Pensions Agreement after protracted negotiations.

However, the two largest members of the federation - the market sector union Bondgenoten and the civil service union AbvaKabo - have said they "do not feel bound" by the deal.

In a joint statement, they demanded compensation from employers during negotiations for collective labour agreements (CAOs), as they consider the government's latest concessions as insufficient.

Both unions said employers' verbal promise for risk sharing was also inadequate.

They also pointed out that their members are represented in 9 of the 10 largest pension funds, and that they are negotiating partners for 90% of the CAOs that need to be concluded.

Despite the remaining objections, Peter Borgdorff, director of the €98bn healthcare scheme PFZW, welcomed the new deal.

"We will wait and see the unions' proposals, but, for now, we are very pleased about the clarity," he said. "We can finally start considering the consequences of the Pensions Agreement for our pension contract."

Hans ten Brinke, spokesman for the €240bn civil service pension fund ABP, agreed with Borgdorff, while Guus Wouters, director of the €37bn industry-wide metal scheme PMT, also underlined the importance of clarity, particularly with respect to the raising of the retirement age.

However, Wouters noted that the conclusions of ongoing surveys - such as into the options for merging existing pension benefits into new contracts - needed to be spelled out step by step.

Gert Kloosterboer, spokesman for the Pension Federation, said several issues still needed to be resolved before pension funds could finalise their new pension contracts.

He referred to one ongoing study into the options for merging existing pension benefits into a new contract.

"In addition," he said, "the responsibilities of unions and pension funds' boards need to be elaborated as well."

The employers organisation for SMEs (MKB Nederland) said it was happy with the final pensions deal, particularly because of the introduced link between retirement age and longevity, as well as the end of the automatic increase of contributions.

Spokeswoman Mieke Ripken said: "We expect the unions will be sensible and be aware the employers can't keep on covering problems by raising premiums."

Employers organisation VNO-NCW declined to comment due to "remaining uncertainties", according to pensions secretary Ab Fraterman, who had been involved in negotiations.

The main elements of the new Pensions Agreement are as follows:

The retirement age for the AOW (the state pension) will be linked to life expectancy, and raised to 66 in 2020 and probably 67 in 2025. AOW benefits will increase by an additional 0.6% a year from 2013. The AOW age will become flexible, but a discount and additional benefits will apply for earlier or later retirement, respectively, than the standard age. Additional pensions will be linked with the accrual of pension benefits to developments on the financial markets. Older workers will be kept active through measures aimed at raising their availability, education, labour conditions and mobility. Contributions for additional pensions will be stabilised. The financial assessment framework (FTK) will be improved and extended to cover a pension accrual based on real but conditional pension rights, rather than on the current unconditional but nominal funding. Tax-facilitated saving for additional pensions will be adjusted from 2013.

During the recent debate in parliament about the Pensions Agreement, social affairs minister Henk Kamp promised additional tax relief for low-income workers who want to retire at 65 rather than 66 or 67.

The minister also confirmed that the tax-friendly 'life course' scheme, or levensloop, would be continued for employees already saving for early retirement. The new tax-friendly 'vitality' scheme will also be open for this purpose, he said.

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