NETHERLANDS - In the aftermath of the Dutch coalition government collapse, the Dutch Parliament declared most pension reforms, including second pillar reforms, 'controversial' last Tuesday.

This means that the outgoing Cabinet is not allowed to make any decisions regarding pensions issues, including plans to raise the retirement age for state pensions (AOW) and to curb the fiscal framework for second pillar pension savings.
 
Although a majority in Parliament are declared proponents of raising state retirement age from 65 to 67, a sizable minority on Tuesday decided that final decision power should not lie with the outgoing Cabinet after the coalition collapse. The major coalition parties CDA (Christian Democrats) and PvdA (Labour) bowed to the minority decision.
 
With that, the proposed legislation to raise retirement age and to limit the fiscal framework for second pillar pension savings have basically been shelved, as has any formal government response to the Frijns and Goudswaard reports - reports on necessary pension reforms ordered by outgoing social affairs and labour minister Donner. By the same token, the evaluation of the supervisory framework FTK has been declared off limits to the outgoing minister and his team.
 
For all intents and purposes, the comprehensive reform of the Dutch pensions system that was just gathering steam, has now ground to a halt.
 
Both Christian Democrats and Labour had hoped to be given the authority to complete the pension reform programme, in particular with regard to the pension age raise. Their opinions diverged on second pillar reforms, with CDA (Christian Democrats) insisting that their minister of social affairs and labour, Piet Hein Donner, should be allowed to continue the job, while coalition partner PvdA (Dutch Labour Party) argued the ball is now in the court of the social partners.
 
Social partners, meanwhile, have indicated that they intend to reopen negotiations both on reforms to the state pension system (AOW) and on second pillar reforms, in hopes of coming up with a workable compromise that they can present to the new government, making the new Cabinet an offer they can't refuse.
 
Even as social partners are grabbing the initiative and the government is stripped of its mandate and forced to back off the pensions issue, Dutch Parliament is pressing ahead with plans to hold hearings to consult the pension industry on the Frijns and Goudswaard reports early this summer.

And the one element not considered controversial and therefore out of bounds, is discussion about the Premium Pensions Institution (PPI), also recognised as the new Dutch IORP.
 
Pensions will undoubtedly play a big role in political campaigns for general elections to be held in June. Oonly the far-right PVV (Liberty Party) and far left SP (Socialist Party) officially oppose raising the retirement age. But even though most political parties are in favour of a raise from 65 to 67 for state pensions, the electorate may not necessarily agree.
 
On the contrary, a 2009 survey of workers aged 45 and up, by research bureau TNS NIPO and commissioned by insurer Aegon, suggested just 15% of workers agreed an increase to the pensions age is necessary. Even so, 80% of those surveyed feared such a raise would nevertheless be forced upon them by law.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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