Dutch sector fears 'unworkable political compromises' for new system

The Dutch pensions industry has voiced fears of “unworkable political proposals” for a new pensions system, if the sector doesn’t come up with proposals of its own.

Gerard Riemen, director of the Pensions Federation, warned that a government coalition agreement wouldn’t offer any footing for a sound system update.

Speaking to IPE’s Dutch sister publication Pensioen Pro, Riemen said his biggest worry was that a coalition agreement would contain “ill thought-out sentences” that “nobody knows how to implement”.

A new government is expected to comprise four or even five political parties, with widely differing views on a future pensions system.

As worst-case examples, Riemen cited “a pensions system with individual assets” or “we support a freedom of choice combined with full mandatory participation”.

“These kind of statements could be very paralysing, as they raise a lot of questions,” he said.

Riemen stressed that there was no margin for paralysis, “as millions of participants can’t be waiting in fear of rights cuts every year”.

In his opinion, employers and unions (known as the “social partners”) and the pensions sector should produce a plan before the formation of a new government starts.

Benne van Popta, employer chairman of the €67bn metal scheme PMT, agreed, arguing that an accord between these parties would offer the negotiating political parties a widely supported solution.

Earlier, Jetta Klijnsma, state secretary for social affairs, repeatedly urged the social partners to reach a deal for a new pensions contract.

She warned that, without a joint proposal, the social partners and the pensions sector would lose the direction, leaving the decisions to the negotiators for a new cabinet.

Representatives of employers and unions were reportedly in favour of waiting until after Dutch elections next month to announce a deal. They are thought to believe that announcing a plan during coalition negotiations would help avoid unwanted government interference.

Van Popta said that in the worst case scenario, with differing political views on pensions, there could be “a very complicated compromise which has to be implemented by the sector within a short period”.