By Ilonka Oudenampsen
The Dutch government welcomed the European Commission’s White Paper on Pensions and the majority of its aims and recommendations, although it is opposed to the review of the IORP Directive and the implementation of Solvency II, Social Affairs Minister Henk Kamp wrote in a letter to parliament.
The government responded positively to many of the twenty recommendations the commission made. It agreed that pension provision in Europe needs to be expanded, that a better balance is needed between work years and years in retirement, and that additional pension saving needs to be encouraged.
Kamp wrote: “The recommendations of the commission are largely in line with the pension policy in the Netherlands. The fiscal facilitation of early pension arrangements has been abolished in the Netherlands and is being discouraged. The Netherlands has an equal retirement age for men and women. Good additional pension arrangements and the fiscal facilitation of these in both the second and third pillar are the core of the Dutch system. The government is also working on increasing the retirement age and supporting a policy aimed at working longer.”
However, the Dutch government has its doubts about the need to review the IORP Directive and the role of the European Union in this. On top of that, the letter said, a small change in the regulatory framework can have huge financial effects in a country like the Netherlands, with its many pension assets.
The minister repeated the opinion of many pension professionals in Europe, that Solvency II is not suitable for pension funds and that insurers and pension funds are fundamentally different from each other. He wrote that an increase in costs due to Solvency II is unacceptable for the Netherlands and that the country has no need for higher solvency requirements.
It also called into question whether a review of the directive is necessary, saying that the EC has not made it clear enough why the current directive is insufficient and why a further intervention by Europe is necessary and desirable.
“If the White Paper helps to ensure that across Europe necessary steps are being taken to keep pensions adequate and affordable, then this means a huge gain for the competitiveness of Europe as a whole and thus also for the position of the Netherlands within that. The Dutch pension system is a in a relatively good state and in this sense fulfils, as the commission also indicated, a role model both within and outside Europe. Of course we would like to maintain this position and therefore it is important that Europe leaves enough room to the member states to individually design and reform their national systems,” the minister concluded.