Four years of debate on the Dutch Pensions Agreement and the proposed Financial Assessment Framework (FTK) have not been worth the effort, according to Peter Gortzak, one of the architects of the 2010 pensions agreement between the social partners and the government.

In an interview with IPE sister publication FD Pensioen Pro, Gortzak – previously vice-chairman of union FNV and now policy head at asset manager APG – said: “What’s on the table now is exactly what we tried to prevent in 2010.”

Elements of the planned FTK, such as an increase in buffer requirements, had already been proposed by the pensions regulator in 2009, he said.

“This was the reason why I and Kees Oudshoorn of employers’ organisation VNO-NCW started the discussion about the Pensions Agreement, as we realised those DNB proposals would turn out to be detrimental for the pensions outcome and/or lead to a significant increase in contributions,” he said.

The 2010 agreement was meant to end nominal guarantees and give pension funds leeway for inflation-proof investments.

This ‘real pension contract’ is not to become law.

Gortzak, while acknowledging that the exact FTK proposals are not known yet, stressed that the essence of the accord – offering an alternative for the required nominal guarantee of 97.5% – “disappeared”.

As a consequence, Gortzak’s initial fear that failure of the Pensions Agreement could stifle indexation for as much as a decade may yet be realised, he warned.

“The buffer increase in the new FTK is a wave pushing forward the indexation options,” he said. 

But Gortzak said there was still hope.

“The Ministry of Social Affairs has told me it has succeeded in eliminating the investment dilemma of offering nominal guarantees while generating sufficient returns,” he said, immediately adding that he questioned how this could be achieved.

“It seems to me there is hardly any margin for this, as the 97.5% nominal guarantee remains in the proposals,” he said. 

In the opinion of the former union boss, the failure of the Pensions Agreement and the real pensions contract is a consequence of the “unfortunate framing of uncertainties” that would come with it.

“The parties involved kept on insisting the nominal framework meant certainty, but look at all the right cuts that had to be applied,” he said.

He also cited fear of lawsuits over ownerships rights.

“However,” he added, “it is clear that merging existing and new pension rights would not have caused a problem.”

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