Change mandatory bogged down in renovation pension

Published on: 15 August 2016

Change of the compulsory pension fund industry to industry pension scheme. That was the core a bill that Klijnsma Jetta State Secretary of Social Affairs last November in a letter announcing the Second room. Meanwhile appeared Perspective Note from the government on the reorganization of the Dutch pension system. Pensioenadvies spoke with two prominent scientists and also asked to respond to the Pension Federation and the Association of Insurers.

We must go back to the middle of the last century in the history of the current system of mandatory. The mandatory aims to have as many employees solidarity pension within an industry to build and to prevent downward competition on working condition pension in the industry. A mandatory shall be granted at the request of the social partners in an industry under certain conditions by the government. Only the compulsory industry pension fund may carry out the plan. Other parties may not. This is an exception to the competition rules, but that is allowed because it is a service of general economic interest.


Proposal not motivated by coming APF

Pension law professor at VU University Professor Erik Lutjens was one of the authors of the report "Mandated industry pension funds and general pension fund" which was published in September last year at the request of the Ministry of Social Affairs. He says that although the issue of mandatory or came specifically to the general pension fund (APF), the research is not motivated by the arrival of the APF. "The background of the study is that small sector pension funds like many company pension funds to keep their heads above water hard by increasingly stringent governance requirements. During the treatment of the APF bill has come an amendment to allow a merger between mandatory pension industry while preserving the original capabilities through ring-fencing. That did not happen because the State Council here objected to. They objected to ring-fencing because there would arise an unfair competitive advantage over insurers within the mandatory because you take away an element of solidarity.


Mandatory is and remains strong point

An important question is whether the mandatory as part of the national debate on the pension in any case is to maintain? Kloosterboer thinks so. "All sounds have one thing in common: there is a mandatory must continue to pension in the Netherlands. is also evident in the Perspective notes that the government sees a form of mandatory participation in sectoral and occupational pension funds as a strength of the Dutch pension system and that is to preserve "Merchant emits a slightly different sound." The social question is what forms of solidarity we find desirable and whether they have sufficient added value for the participants in a system which is reaching more personal rights and freedom of choice. in such a system is what we are concerned even still talk of solidarity, because you put together the risk of longevity, short life and shares disability."


European law

Netherlands is unique with the mandatory or elsewhere in Europe, including countries that have a similar system? We asked Professor Hans van Meerten, Professor of international pension law at the University of Utrecht. "You have to distinguish between small and large mandatory. The small mandatory means that you as an employee required to participate in the pension plan from your employer, but the implementation is free. At the large mandatory state government that participation in an industry pension fund is binding for the entire sector. In the Scandinavian countries, you have a kind of combination in which the collective agreement determines participation in a pension scheme. However, the implementation is free. What the Dutch mandatory participation in the pension fund unique is that this may be only a Dutch foundation. We are talking about approximately 80% of the Dutch pension participants. I'm a long time whether this is allowed under European law. That obligation proposition has been tested in the past, the question arose whether the scheme was sufficient social to justify the infringement of competition law. But if you look at nationality, I ask myself. Why a scheme could not be implemented by a Belgian party as offering a better pension for the participants.


Read the full interview here (in Dutch).


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