Dutch minister proposes alternative way to discuss pensions
Written by Tineke de Vries
Dutch pension providers, schemes and insurers should no longer communicate about a fixed amount, but about three possible scenarios: standard, optimistic and pessimistic, according to Wouter Koolmees, Minister of Social Affairs.
The minister hopes these three area will improve pensions communication and remove as much member uncertainty as possible.
In a letter to Parliament, the Koolmees wrote: “I find it important that members receive more insight into their expected retirement income and that it is clear that this could be higher or lower. A better overview creates a clear perspective for members. That’s why I want to replace the single amount that is currently being shown on mijnpensioenoverzicht.nl as the ‘expected retirement income’ by three different amounts. These amounts will be calculated via an expected scenario, an optimistic scenario and a pessimistic scenario.”
Koolmees believes the communication will also need to give a better insight into indexation. “Many pension arrangements have an indexation ambition. But as the previous period taught us, pension funds are not always in a position to increase pension payments in line with inflation. However, the chance of no indexation in certain years is not included within the ‘expected retirement income’ calculation. For schemes with a provisional indexation, this calculation should therefore mainly be considered an ambition, and it does not give insight in the expectation that this ambition can be reached in