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Sunday 25 August 2019

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Dutch state pension should be boosted if cuts are made, union says

Written by Sunniva Kolostyak
14/08/2019

If Dutch occupational pensions are reduced, the government must increase state pension to maintain pensioners’ purchasing powers, trade union FNV has said.

The call for an increased state pension has come in response to the government’s original plan to apply discounts to occupational pension funds with less than 102.4-104.2 per cent in policy funding ratios, and the recent pension agreement to not apply discounts if the funds have a 100 per cent policy funding ratio.

However, due to disappointing returns, low interest rates and challenging global markets, the average funding ratio has dropped below the 100 per cent mark, to 98 per cent.

In a statement, the union noted that the agreement was made based on the assumption that occupational pensions would not have to be cut.

Commenting on the call, Tuur Elzinga said that first of all, the discussions around the implementation must be allowed to start again to allow for more clarity about calculation rules and the framework in general.

He said: “But as long as discounts are an option in the current system, the government has a responsibility to maintain pensioners’ spending power. Raising the station pension is a good option because it has gone down in real value over the past few years.”

“All generations benefit from a higher state pension, not just the elderly today. Young people now will also receive a higher state pension. And it is favourable for pension funds as the share of state benefits in retirement provision is increasing,” Elzinga said.



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