Largest pension fund calls on politicians to keep pension law as-is

ABP, the largest pension fund in the Netherlands, is calling on politicians to stop tinkering with the pension law for the major reform of the pension system. Board chairman Harmen van Wijnen states that politicians engaging in a renewed discussion about the law in the months after the election are causing unrest.

This is “absolutely undesirable,” he said. Other large pension funds also emphasized that it is very important that the changes that have already been initiated continue as planned.

“I am calling on all parties involved to keep the interests of the Dutch participants in mind above all else,” said Van Wijnen at the publication of ABP’s annual report. Thanks to the transition to the new pension system, ABP was already able to use more flexible rules, he said. As a result, millions of pensions at the civil servants fund could increase by more than 3 percent as of January this year.

Van Wijnen was responding to proposals from some Members of Parliament to revisit the pension law, which has already been adopted. For example, the Nieuw Sociaal Contract (NSC) political party proposed allowing pension fund participants to vote on the switch to the new system.

Outgoing Minister Carola Schouten, who handles Cabinet pension policy, said last week that she did not want to change the pension law again, but a new Cabinet can still do this. It is clear that the opponents of the new pension system now have a majority in Parliament. Three of the four parties in Cabinet formation talks, PVV, NSC and BBB, want to change the law.

The opinion from metal workers pension fund PMT is similar to that at ABP. “There is no way back,” said Terry Troost, the chair representing the employers at the fund. “We have included our employers and participants in the developments and upcoming changes, and we are working hard on IT in preparation for the introduction of the law.”

PMT, as well as the major funds PFZW and PME, also announced pension increases at the end of last year. Like ABP, they also took advantage of the relaxed regulations in the run-up to the new pension system. “The increases therefore provide a glimpse into the new world, in which pensions can grow more easily with the economy,” said PFZW chairman Joanne Kellermann.

The current coverage ratio of the funds, an indicator of their financial health, actually fell slightly last year. The latter is partly because interest rates on the financial markets fell in the last months of the year. As a result, the funds’ liabilities were higher.