NETHERLANDS - The high pensions security of 97.5% will damage the Dutch economy, and will eventually harm the members of pension schemes as well, says the head researcher of the daily Het Financieele Dagblad.

“Building up the required buffer of 30% within 15 years, will withdraw at least €3bn a year from the national economy,” Mathijs van Gool wrote.

“As a result, the security of the very pensions will decrease,” referring to the strict rules of the new financial assessment framework, or FTK.

“The salary costs will keep on rising, because of higher pension premiums. This will worsen the position of the Dutch industry,” van Gool argued. “Moreover, the extra savings will mainly be invested abroad. And it’s not sure if the money will ever return.”

According to the researcher, who also heads FD’s pension fund, the process will lead to a further cutting down of pension schemes.

“Because of the limit to pension premiums, more security will mean economizing on schemes. Pension funds will shift the risks to their members.”

“Members will have less spending power, because of higher premiums. And lower benefits will force pensioners to economize on their spending,” van Gool explained.

“The present average funding ratio of between 110% and 120% is already a significant buffer. It provides the Netherlands with the highest capital cover in the world,” he said.

According to van Gool, the top priority is a healthy and growing national economy. “Holland must accept a lower pension security for a higher and more secure pension.”