Imagine being responsible for the paragraph on pensions in an election platform. After more than a decade of pushing and pulling in the polders, a detailed pension agreement is now in place. The Ministry of Social Affairs and Employment hurriedly published a corresponding series of detailed legislative proposals for consultation just before Christmas. What on earth is there to write about pensions at this point that could still score a political point?
To answer this question, we examined 14 draft election platforms. Three themes stand out with regard to funded/second-pillar pensions, on which (almost) the entire political spectrum has included something.
Starting with the proposed pension system. The current outgoing coalition parties, VVD, CDA, D66 and CU, are carrying the noise of the pension agreement. This was to be expected, of course. We also know that the PvdA and GL have endorsed the pension agreement, although GL makes no mention of the agreement and its contents in its program. These six parties alone represent more than two-thirds of the seats in Parliament in the polls.¹ Support for the new system thus seems assured for the coming term of office.
The theme of freedom of choice is seized upon by all parties - with the exception of CU and DENK - to raise their profile. With regard to second-pillar pensions, D66 and VVD both argue for pension premium vacations for employees, so that they can use them for their own homes, for example. This fits in with the parties’ reasoning, which is primarily based on the individual. It is also a convenient way for these parties to continue to push for further individualization, without dismissing the pension agreement. At the same time, it clashes with our collective system, which is grafted onto paternalism.
Finally, the topic of pension accrual by self-employed individuals. This is a classic theme that attracts a great deal of attention, but one on which there are (very) diverse views as to possible solutions. It is a theme that was also discussed extensively, but with little result, in the context of the pension agreement, and on which - apart from the Labor Party, which proposes a general pension obligation for all workers - most parties do not seem to want to burn their fingers. Pension accrual by self-employed individuals will be discussed at length in the cabinet formation as part of an integral vision of the labor market (balance flex / permanent).
The originality/consolation prize - depending on your political preference - goes to Forum voor Democratie, who are the only ones to propose a fundamentally alternative pension system with ultimate freedom of choice for all workers and no obligations for self-employed workers. In their ideal world, second-pillar pensions would be managed by “experts rather than social partners”, there would be more freedom of investment with less strict supervision by the Dutch Central Bank, a higher actuarial interest rate, and all of this would be based on voluntary participation in pension plans.
It is also interesting to consider what is not included in the election platforms. Subjects such as taxation, the calling into question of compulsory insurance and geographical investment rules are, with a few exceptions, not found in any of the platforms. On the one hand, this is striking, given that several of these topics were (prominently) mentioned in previous elections and/or were part of the public debate in the past cabinet term. On the other hand, with the conclusion of the pension agreement in outline form from 2019, and the agreement on its elaboration from 2020, a lot of political attention has already been given to the new system. Political parties have, probably for that reason, mainly profiled themselves as for or against the new system, rather than addressing “new”, potentially divisive topics.
Thus, despite the pension agreement and the resulting legislation, the subject of pensions has certainly not turned out to be an underdog in the current election programs. Quite the contrary, in fact. If not paragraphs, then entire chapters have been devoted to pensions by program committees.
At the same time, in the end, it is not so much about the programs, but about what will ultimately be in the new coalition agreement. At least three, and possibly more, parties will be needed for a majority after the elections. And those parties all want something different. The chance of quartets being formed is therefore very real. As a result, political parties’ wishes that were not included in the election platforms could end up in the next coalition agreement.
Or in other words, despite the high level of support for the pension agreement that can be inferred from the election platforms, our pension system is not a peaceful asset. Certainly not after March 17, when the formation begins.
Nick van de Sande – Korpershoek
Strategic policy officer