Dutch pension minister Carola Schouten has urged the pension sector to continue implementing the new defined contribution (DC) pension system despite a slim majority of the newly elected Dutch parliament being opposed to the new pension law in its current form.
The comfortable parliamentary majority for the switch from a defined benefit (DB) to a DC system evaporated on Wednesday following the landslide victory of the far-right Freedom Party (PVV).
But pension funds need not panic now, Schouten said on Thursday at a meeting organised by PwC and the Dutch Association for Insurers in The Hague.
“In the position you are in, I would not follow too closely what is happening [in politics], but just continue doing what is needed [to implement the new pension law]. I personally wouldn’t sit on my hands,” said Schouten.
“I believe in this law, otherwise I would not have submitted and defended it,” she added.
The pension fund trustees and trade union representatives spoke to IPE’s sister publication Pensioen Pro on the margins of the meeting, and said all were continuing preparations for the new system as usual. After all, the pension transition is already well underway, they said.
Minority government
The formation of a new government will also likely be very difficult and take a long time, they said. Even if a prospective government is formed that wants to change the new pension law, the legislative process would take a long time.
Moreover, the fact that the centre-right VVD, one of the architects of the pension reform, announced on Friday that it would not be part of a future government means the new coalition will be most likely a minority government which would have to find ad hoc majorities for any legislative proposals it wants to be considered.
This would make legislating on pensions a daunting task. And even if a prospective anti-reform government would somehow manage to change the pension law or retract it altogether, this decision would still have to pass the Senate where pro-reform parties retain a majority.
Moreover, the first pension funds will already make the transition to the new DC system by 1 January 2025.
There is even a chance that negotiations for a new government will have broken down by the time, or that a fresh cabinet has already fallen with fresh elections underway, sources mused over a beer after the minister had spoken.
Legislative changes
Schouten did not want to speculate about possible changes to the pension law that the new Parliament or the next government could implement.
“I really don’t know what will happen during negotiations,” she said. Nor did she address the question of how she personally looks at the NSC proposal to require member consent for the transition of DB accruals to DC.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra
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