The Dutch pension system will be drastically changed in the coming years, without the approximately 10 million participants of the pension funds having had a say. Wilma Schrover, director of seniors’ association KBO-Brabant, pulls the emergency brake. ‘Our pension funds are split into as many pots as people. This will not only create chaos, but it will also mean a huge deterioration, because all the risks of investments are placed with the participants. I hope that something can be done about it during the cabinet formation.’
The entire conversation between SYP WYNIA and WILMA SCHROVER is included THIS VIDEO annex PODCAST from Wynia’s Week TV WWTV, freely available to all viewers and listeners.
Wilma Schrover states that the pension system change has been pushed through in a series of backrooms, using false arguments such as ‘we have been meeting about it for 15 years’. De Nederlandsche Bank fulfills various dual roles, from supervisor of both the financial sector and pension funds to advisor to the cabinet formation. The Dutch Central Bank, together with ministries, trade unions, insurers, asset managers and pension funds, is once again part of the pension think tank Netspar, which provides the supposed ‘scientific’ guidance for this monster project.
Schrover is surprised by the role of the trade unions and the Senate and House of Representatives, because these are the institutions par excellence that should care about the interests of the participants in the pension funds, who are also the large majority of the citizens of the Netherlands. In practice, the unions have dropped all the conditions they set in advance. And the MPs of parties that agreed to the new law – parties that kept the Rutte cabinets in place in recent years – often did so reluctantly, but because of party discipline.
Participants the losers
Schrover sees the citizens, who are also the participants in the pension funds, as the big losers and the pension funds and especially the private financial sector sees them as the big winners. ‘The risk of pension investments falls entirely on the participants, their rights are reduced. It is a glaring deterioration for the citizen. People have to pay a fifth of their wages for the rest of their lives to a pension fund that they cannot choose themselves and that is managed by trade unions and employers’ associations – again without them having any personal say in the matter. But for most people it is by far the largest piggy bank they have.’
In the eyes of Wilma Schrover, the laughing third party is the private financial sector, which has, with good reason, been making TV advertisements for ‘an extra pension pot’ since the law was passed. Previously, the employee pension together with the AOW was sufficient to continue your lifestyle after retirement, but now ‘an extra pension pot’ has to be involved – which financial companies logically see value in.
Can it be done differently?
Is there still a chance to reverse the system revision? Wilma Schrover is not optimistic, because the pension lobby is very powerful. But she still sees some possibilities. ‘It would be best to repeal the law, but of the parties that are now forming, this is especially not convenient for the VVD, because as a government party it has always supported it. An option to introduce the new system only for young people is also not very promising.’ She sees the best opportunities for a plan from Pieter Omtzigt’s NSC: letting participants of pension funds vote per fund whether they want it. If a majority is against it, the system reform will not go ahead at that fund. But of course everything depends on the further course of the formation.
Schrover: ‘We had the best system in the world, but it has only deteriorated since the turn of the century. And now they are embarking on a gigantic system overhaul, while it has long since become apparent that the Dutch government is not good at that at all. What’s interesting is that this time it is a risky experiment with private funds from the citizens of the Netherlands. Because that’s what it is.’
Wilma Schrover has not become happier about the Dutch pension world in the fifteen years that she has now been director of KBO-Brabant. Who sees them as a closed bunker, where journalists – such as TV journalist Cees Grimbergen of Omroep MAX – are also kept out by all means.
‘A closed stronghold’
Schrover: ‘1,500 billion euros are managed by 10 million Dutch people. But it is a closed stronghold.’ Not only have the millions of participants so far had no say in the new system, but many pension funds are also making all kinds of political investment decisions, such as not investing in Shell or investing in the arms industry.’
‘Now the pension funds are again offering to invest pension money in the ‘green’ electricity network of the Netherlands, although it is not certain that it is a good investment. The primary consideration that pension funds must make when making their investments is whether it benefits the purchasing power of (future) retirees. Other considerations are of course conceivable, but secondary.’
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