Dutch Prime Minister Keen To Avoid Pension Cuts, But Not At All Costs

Dutch prime minister Mark Rutte has said he was keen to avoid cuts of pension rights and benefits next year, but not at all costs.

Speaking on a television news programme last week, he highlighted that enough money must remain available for education, security, defence as well as healthcare.

Rutte was asked how much it mattered to him that a pensions accord was struck as soon as possible, and whether he was prepared to fork out extra money to achieve this goal.

According to the prime minister, a €7bn package of measures offered by the cabinet last November was not enough to make trade unions and employers reach a compromise with the government in the negotiations for pensions reform.

Earlier last week, four of the five largest pension funds in the Netherlands said their funding had deteriorated in the first quarter, increasing the likelihood of rights discounts next year and in 2021.

The pension funds ABP, PFZW, PMT and PME suggested that a new pensions agreement would reduce the chances of rights cuts.

The prime minister said it should be clear that making more money available to prevent cuts and reignite negotiations would come at the expense of other priorities.

The trade unions have made scaling back the government plans for raising the retirement age for the state pension (AOW) a key issue.

They want to cap the retirement age at 66, although the cabinet had already decided that the AOW age was to increase to 67 plus three months in 2022 and would follow longevity thereafter. 

Accrual tension

Another issue in the negotiations is compensation for older workers affected by a pending replacement of the current average pensions accrual with an – actuarial fairer – degressive accrual.

The costs of this measure – which has also already been decided by the cabinet – are estimated at between €25bn and €100bn, depending on the degree of compensation. The government has not yet promised to pay part of it though.

Rutte’s comments came as rumours have increased that the three parties are preparing for another round of negotiations and social affairs minister Wouter Koolmees consults opposition parties about ways to break the deadlock.

However, the prime minister declined to confirm that he would chair new negotiations, explaining that he “didn’t want to disturb the process”.

Rutte said he thought a pensions accord was possible, while acknowledging that opinions still differed significantly on the subject of the state pension age, an early retirement option for workers in physically demanding jobs, as well as mandatory pensions accrual for self-employed workers.

When asked by IPE’s Dutch sister publication Pensioen Pro, the largest union FNV said that it had not been invited to negotiations.

A spokesman said the union was still in “action mode” to put pressure on the government.