NETHERLANDS - The fate of the Dutch Pensions Agreement will decided by the union federation FNV next Monday, after the country's parliament re-endorsed it last night.

Parliament debated a new draft yesterday after social affairs minister Henk Kamp was forced to make amendments following strong objections from FNV Bondgenoten and AbvaKabo.

If FNV Federation once again objects, the minister will simply follow an earlier, basic version agreed by the coalition government on the future of the pensions system, he said.

To get the labour party PvdA on board, Kamp pledged transitional arrangements to prevent older people on benefits from facing financial problems during their final year before retirement, as the retirement age for the state pension AOW will be raised from 65 to 66 in 2020.

The agreement will now also allow low-income workers and those who have worked for a certain number of years to retire at 65 after the retirement age has been raised to 67 in 2025.

As a result of the measure, the group of workers will only face a discount on their AOW benefits of 3% in total, rather than the 13% without tax benefits.

The minister noted that he had yet to examine the financial implications of the change.

Kamp rejected a proposal from the liberal democratic party Democraten 66 (D66) to start raising the retirement age immediately in smaller steps, stating that older workers needed ample time to prepare for their retirement.

D66 and the right-of-centre Freedom Party PVV said they opposed the Pensions Agreement because there were too many "loose ends".

PVV spokesman Ino van den Besselaar added: "The Pensions Agreement is a far too complicated a monster."

Almost all political parties said they opposed expected returns as the future criterion for pension funds' liabilities.

To meet union demands that workers in hard manual jobs can keep on retiring at 65 without loss of income, the minister has also promised that the 'life course scheme' - or 'levensloop' - will be continued for tax-friendly saving for early retirement.

In addition, the new tax-friendly 'vitality scheme' for unpaid leave and part-time retirement will now also contain the option for saving as much as €20,000 tax-free for early retirement.

During the debate, Kamp pledged legislation that would guarantee the new pensions contract was "generation-proof" by dividing up costs and benefits over generations.

He added that he would implement a previous motion from Christian Democrat MP Pieter Omtzigt calling for "a prudent discount rate, mandatory and solid financial buffers for pension funds and simplicity" in the new system, with benefits linked to life expectancy and financial markets.

The minister also suggested workers and employers could agree on risk-sharing through specific arrangements on pensions contributions in collective labour agreements (CAOs) on the company or industry level.

Kamp said all current surveys, such as into the possibility of merging existing pension benefits with the new pension contract and into a new financial assessment framework, must be finished by next spring.

A concrete bill for a new pensions system should be ready in 2013, according to the minister.

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