Compromise sought after for pension plan
By The Holland Times Wednesday 23 September 2009, 16:09
The Netherlands largest employer's representative organisation is calling on Cabinet to increase the national retirement age. If this doesn't occur, they say the government must compensate employees by increasing pension allocations on income tax.
Last year, in an effort to decrease total pension payments, Cabinet devised a somewhat controversial economic plan to raise the national eligibility age for pension benefits from 65 to 67. The move received luke-warm support from the Nederlandse Ondernemingen en Christelijk Werkgeversverbond (Confederation of Netherlands Industry and Employers; VNO-NCW).
Currently, a share of all Dutch employees' income tax benefits are set aside for retirement pensions. The precise amount is currently been negotiated by the VNO-NCW, trade union representatives, and Cabinet.
However, the VNO-CNW says limiting the amount of total pensions creates a dangerous 'pension hole' for if employees retire at the official retirement age, they will face a two year delay before receiving any benefits. National worker's organisations such as the Federatie Nederlandse Vakbeweging (FNV) recently threatened that if the state pension age increases, the loss in income must be compensated for by employers. This proposal has employer's federations scrambling to get the government to increase the national retirement age from 65 to 67 to coincide with the increase in pension eligibility.
"The VNO-NCW is trying to manipulate tax laws to raise the retirement age," says pension fund expert Robert Goudriaan from fellow employer's federation AWVN. While Goudriaan says he finds it logical for the retirement age to parallel pension eligibility, the VNO-CNW is not doing itself any favours by trying to intimidate the government. "This form of coercion is not the best solution. Ideally, the social partners themselves need to find a viable solution."
That chance is minimal according to employers. Although a special advisory board comprising trade unions, employers' representatives and experts - the Sociaal-Economische Raad (Social Economic Council; SER) - has until 1 October to come up with an alternative plan to raising pension age eligibility, employers no longer believe that it will succeed. The FNV has declared its intention to find a viable compromise, but has complained to the government that the talks have being beset by constant stalling tactics from the VNO-CNW.
While employers are saying the round-table discussions are petering out, many outside analysts remain worried about what possible compromises will be made to pension payments. A possible solution could be that the state pension age is increased, but exceptions could be made to keep eligibility at 65 for people with particularly low salaries or heavy workloads.
