Government unveils retirement age rise plan

The coalition parties in the Netherlands have finally reached a deal on raising the retirement age from 65 to 67.

The coalition parties in the Netherlands have finally reached a deal on raising the retirement age from 65 to 67.

The Christian democrats, Labour and orthodox ChristenUnie have hammered out complex new rules that attempt to deal with concerns about fairness for people who do heavy physical work, or who started work young. Nonetheless, the plans have met with a storm of opposition protest.

Ministers announced their plans to raise the state pension age in March because, they feel, the measure is necessary to maintain the welfare state with an aging population. The government offered trade unions and employers' organisations a chance to come up with an alternative that would save a similar 4 billion euros, but talks between the interest groups blew up just ahead of the deadline on September 30.

Under the current agreement, people who are aged over 55 on 1 January will still be able to draw a state pension when they are 65. In 2020 the retirement age will rise to 66, and in 2025 to 67. Not only will the state pension age rise, but employers with company pensions will also have to keep on paying contributions to the social security system for an additional two years.

People who started work young and have worked for at least 42 years will still be able to retire at 65. What’s more, employers of people with ‘heavy occupations’ - such as construction workers - will be obliged to give them lighter work after 30 years. If they don’t, they employer will be liable to pay a premium that will enable the employee to draw a pension at 65.

The trade union federation FNV describes the plans as a “bleak cutback”. The federation’s chairwoman Agnes Jongerius said the plan was about money and not people.

The plan has come in for heavy opposition criticism. The Socialist Party described it as “pension robbery”. Green Left leader criticised the complexity and sustainability of the proposal, describing it as having “the shelf-life of a fresh herring”. The right-wing liberal VVD also slated the government’s solution as “too little, too late, too complicated.” Populist Geert Wilders’ Party for Freedom said the government “ought to be ashamed”.

Meanwhile, a report released on Friday comparing pension systems around the world ranks the Netherlands in first place. The Melbourne Mercer Pensions Index, a collaboration between consultancy Mercer and the Melbourne Centre for Financial Studies, analysed the pension systems in 11 countries, ranging from China to Sweden.

Although the study gives the Dutch pension system the highest ranking, but not A-grade status. The report’s recommendations for improvement include “an increase in the state pension age to reflect increasing life expectancy”.