NETHERLANDS Pension changes under fire
Monday 24 June 2013
The government's plans to reduce the amount workers can save tax-free for their pensions are too expensive and raise too many questions, according to the government's most senior advisory body.
The Council of State, which publishes recommendations on all new legislation, said in a statement it cannot give positive advice about the plans in their present form.
Parliament is due to debate the controversial changes later on Monday. The government wants to reduce the amount workers can put into corporate pension schemes from 2.25% of their gross salary to 1.85%.
Youngsters
Other research published on Monday shows one third of youngsters expect to still need a part-time job to make ends meet when they retire at the age of 72.
The Dutch pension association commissioned the research to try to assess what people consider the impact of the changes in corporate pensions will be.
The Dutch pension association commissioned the research to try to assess what people consider the impact of the changes in corporate pensions will be.
Earlier this month, the financial services regulator AFM said junior finance minister Frans Weekers is much too optimistic about the impact of changes to the pensions system on young workers.
Continuous work
Weekers says people will still be able to build up a pension equivalent to 70% of their last-earned salary. However, in practice this will never happen, the AFM said in a briefing to parliament. For example. Weekers’ figures assume a worker turning 25 now will be in continuous work until he or she is 71.
But most people currently build up a pension over less than 30 years, the AFM said. This is because many people have a spell without work or in a part-time job and spend periods as self-employed.
According to the Financieele Dagblad, even if the lower house of parliament votes in favour of the changes during Monday's debate, it is unlikely to get through the senate.
Prime minister Mark Rutte said last week that if people put less money into their pensions they would have up to €1,000 more a year to spend. That, in turn, would be good for the economy, Rutte is quoted as saying.
Prime minister Mark Rutte said last week that if people put less money into their pensions they would have up to €1,000 more a year to spend. That, in turn, would be good for the economy, Rutte is quoted as saying.
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