Several Dutch political parties have raised questions about the inter-generational effects of proposals for a new financial assessment framework (FTK).

Their concerns were triggered after Aon Hewitt and the Dutch Pensions Federation published analysis suggesting the new FTK would have a different impact for different generations.

The Dutch Bureau for Economic Policy Analysis (CPB) had previously concluded that the new FTK would have a broadly neutral inter-generational impact. 

Carola Schouten, an MP for the opposition party Christen Unie (CU), said: “The big question is how the distributions of assets between young and old is to work out.”

Coalition partner PvdA has called on state secretary Jetta Klijnsma to address the conflicting conclusions.

The PvdA also asked for Klijnsma’s opinion on whether the FTK’s proposed rules for indexation in arrears, as well as the “undoing” of rights cuts, were too strict.

According to Aon Hewitt, under the new FTK, total pension benefits for a 30 year old would increase by €37,000 to €487,000.

However, 50 year olds and 70 year olds would see their total pension drop by €6,000 to €428,000 and by €11,000 to €489,000, respectively, it said.

The Pensions Federation predicted that the new FTK would particularly damage pension rights for young workers, and suggested it could take up to 80 years before a pension fund recovered from a shortfall incurred during a crisis.

Speaking recently on consumer TV programme Radar, Aon Hewitt argued that, for a 70 year old in a “neutral” economic scenario, the new FTK would lead to an additional 3-percentage-point loss in purchasing power to 26% over 20 years.

Also on Radar, Peter Borgdorff, director of the €151bn healthcare scheme PFZW, claimed that current FTK proposals would make any inflation compensation for a 70 year old “impossible”, while a 50 year old would have to forego on any indexation in arrears before retirement.

Previously, Borgdorff estimated that PFZW’s participants would, overall, lose 5.5 percentage points of purchasing power over the next 15 years as a result of the new FTK.

Parliament is to debate the FTK bill on 13 October.

The new legislation is scheduled to come into force on 1 January 2015.

However, the state secretary has already made clear that parts of the new FTK could be introduced at a later date.

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