What do the transition to the new pension system and a military mission have in common? They are both complex operations and the stakes are high. Peter van Uhm, former Armed Forces Commander, draws the parallels. “Get in front of the troops yourself and be honest when things go wrong.”
A few days before Peter van Uhm retired as an Armed Forces Commander, he received an empty flowerpot from Hans Hillen, who was the minister of Defense at the time. He accepted the gift with surprise. The next day, he received a little bag of potting soil. The day after that, the apotheosis arrived: a package of flower seeds. With those, he could sow the proverbial geraniums he could then enjoy as a retiree. Not long after this, Van Uhm was at an outdoor cafe in Maastricht with his wife. The tables were separated by containers of... geraniums. A picture of a smiling Van Uhm with a raised glass of beer behind the red blooms was quickly taken and emailed. “That photo went through the entire ministry,” he happily reminisces. Incidentally, Van Uhm (68) was not really the type to “sit and relax behind the geraniums.” How does the retired general view the transition to the new pension system, an operation that, in terms of scope and complexity, could perhaps be compared to a military mission?
First another question: how was your own pension set up?
“When I was sixteen, I already knew I wanted to pursue a military career. I went to the Royal Military Academy and got a job in Defense. At the time it didn’t occur to me for a second that I was also making a choice regarding my pension: it was automatically accrued for me for forty years, through ABP. Only when I got older did I become aware how well that was set up. I never had to worry about my pension and I consider myself very lucky in that. So, I’m speaking from a very comfortable position.”
Military personnel often retire earlier than the average Dutchman. Why is that?
“All officers (starting from the rank of second lieutenant, ed.) used to retire at age 55, or as we say, functional age release, until just over a decade ago. The military profession is tough; physically and mentally demanding. You can’t really have someone in their sixties doing a patrol with a heavy thirty- to fifty- kilo pack, in sometimes tropical conditions. And you can’t put every serviceman in a staff position either, because then the army would be unbalanced. But now the policy is that military personnel get functional age release five years before the state pension age. When the state pension age is raised, our retirement age rises with it. So, the army is also going along with the social trend of working longer.”
How can funds and administration organizations deal with participants’ uncertainty and concerns during the transition to the revamped pension system?
“I am reminded of the major cutbacks I had to make in the army, years ago: out of seventy thousand jobs, twelve thousand had to go. I stood in front of the troops myself: a room of angry soldiers who were all worried about their jobs. You have to be honest with them, even if the situation is still uncertain. Tell them that you are working on it and that you will create clarity as soon as you can. This also applies to the pension sector. The minister will probably give extra time for the transition. That’s nice, but it also means that people will have to deal with uncertainty longer. In any case, keep communicating. We learned from the Benefits Affair how important it is to keep in touch with people who are waiting for a solution. And be honest about the consequences of the transition. Negative clarity is also clarity; you have to have the courage to offer it. Tell participants that the current system is no longer tenable, that the level of their pension may vary, but that there is also a buffer to help absorb major setbacks.”
Pension organizations have millions of participants, so they don’t really have the option of getting themselves in front of the troops.
“No, but they can be visible in social and traditional media, try to explain the complex pension matters in plain language and talk to people in person as much as possible. Pension funds and administrative organizations don't have to do the explaining all by themselves; I also see an important role in this for employers' organizations, trade unions and politicians. The pension discussion has led to great division, but now that a democratic decision has been made to reform the system, the parties must close ranks. The mission can only be accomplished together. Don’t get stuck in your own opinions, and start talking about ‘us’ instead. There is enough polarization in society.”
Over the next few years, all pension schemes must be transferred to the renewed system. What does that require of administrative organizations?
“I have deep respect for the people at APG who have to do this gigantic job: fairly distribute that one big pot of 1,500 billion euros among millions of individual pension assets. This is enormously complex, but if you boil it down to its essence, the goal is actually very simple: to ensure that people receive their pensions in a decent manner, now and in the future. You have to do this right; not only technically, but also with an eye for the human dimension and with empathy. Individual pension assets require an individual approach. What is the person's personal situation? Is someone married or divorced, what jobs did they have, is there a pension gap, how do you deal with survivors? You have to learn to listen and look at each participant as a person. If people feel that they are well taken care of and that they are being heard, that will have a deeper effect: it will contribute to restoring Dutch citizens’ trust in the government and institutions.”
But things can also go wrong, which would actually damage that trust even more.
“Growing pains are inevitable. The transition will not be perfect right away. Of course, it is terrible when things go wrong and people are duped, but you have to be honest about that too. Don’t try to hide it, just admit it. When I was Commander of the Armed Forces, I was told during a working visit to Afghanistan that one of our F16s had bombed a house, killing not only Taliban but also innocent civilians. I went live on Radio 1 and honestly explained that the pilots had done all the checks properly, but that something disastrous had still happened. That our army was responsible, but that the blame lay with the Taliban, who were holed up in houses and had not let the residents go. The news did not even reach the newsreels or the front pages of the newspapers, because everyone understood our explanation. Even with the transition to the new pension rules, people will understand that sometimes things go wrong, as long as you are open about it, listen carefully to the people that are affected and make sure you have enough capacity to resolve it quickly. Hopefully we have learned that from the Benefits Affair and the earthquake in Groningen.”
