Why pensioners think Dutch pension reforms are a work in progress
Koepel Gepensioneerden, the largest advocacy group for senior citizens in the Netherlands, says the landmark pension reforms which kicked off this year still need work to avoid disadvantaging pensioners
The pension landscape in the Netherlands, which includes some of the largest funds in the Eurozone, is undergoing a transformation. The main goal? Moving from a defined benefit to a defined contribution system.
The Netherlands is facing the same demographic crunch as many other countries which is making pensions more expensive.
Earlier this year millions of workers transitioned to the new system.
While the Dutch government, unions and employers’ organisations were overall supportive of the pension reforms, pensioner advocacy groups have been more critical and as far as they are concerned there is still work to be done.
Lets introduce the senior citizens’ association that managed to get a seat around the table: Koepel Gepensioneerden is the largest advocacy group for senior citizens in the Netherlands.
Through its more than 100 affiliated organisations, it represents around 150,000 pensioners. Nearly all associations representing pensioners linked to company and sector-wide pension funds, as well as pension insurers, are linked to it.
Following lobbying efforts the Dutch House of Representatives instructed the pensions minister to involve the organisation in the process of reworking the pension system.
“At our urging, several provisions aimed at strengthening the voice of pensioners were included in the final legislation,” said John Kerstens, chair of the Koepel Gepensioneerden.
These included the right for pensioners’ associations to be heard regarding the transition plan ahead of a pension fund’s move to the new pension system.
As a result of further lobbying a review is currently underway into so-called “additional purchasing power instruments” to help pension funds deliver greater certainty around inflation-protected pensions.
The group is currently drawing attention to increasing restrictions on the ability of pension funds to operate how they see fit.
Koepel Gepensioneerden is concerned that supervisor De Nederlandsche Bank places too strong of an emphasis on a number of elements that are especially disadvantageous for pensioners.
These include a shorter period over which financial gains or losses are spread out and the removal of the redistribution principle between generations.
“This is taking place in the knowledge that pension fund boards are not in a strong position to resist, given that they require DNB’s approval in order to transition to a new pension arrangement in the first place,” Kerstens explains.
Kerstens said: “Standing up for the rights of pensioners is not considered particularly ‘sexy’, supervisors such as De Nederlandsche Bank consistently appear to place greater emphasis on the interests of other participant groups.”
Where pension funds are required to apply a “balanced consideration of interests” – and where questions can be raised about the extent to which they remain in direct contact with the people pensions are actually intended for – pensioners’ advocacy associations do maintain that direct connection, according to Kerstens.
“In fact, it is their very reason for existence.
“As more risks are shifted towards members and pensioners under the new system, it is, in our view, logical that they should also receive greater influence,” Kerstens says.