Modernising the pension system. The Netherlands has a robust pension system. But changes in the labour market, rising life expectancy, the financial crisis and low interest rates have exposed its vulnerabilities. It is not adequately meeting expectations, it is characterised by intergenerational tensions, and it is no longer aligned with the changing labour market. The pensions dialogue, a national consultation exercise held over the past few years, revealed broad support for modernising the pension system. Reports published by the Social and Economic Council (SER) in 2015 and 2016 provide useful guidance for this endeavour. As it goes about the task of reform, this government intends to follow the contours of a new pension system outlined in the SER’s reports. The SER is studying the option of personal pension capital combined with the retention of collective risk sharing. It will shortly offer an advisory opinion on this option. The government wishes to move, together with trade unions and employers’ organisations (the ‘social partners’), towards a modernised pension system which addresses the vulnerabilities in the current system while maintaining its strengths (compulsory participation, collective implementation, risk sharing and supportive tax rules). Building on the SER’s work and reports, the government intends to reform the pension system. Pension capital will be more personal in nature, risks will be shared collectively and the uniform premium system will be abolished. The government looks forward to receiving a broadly supported proposal from the SER. The following elements are essential. • The uniform pension premium system will be abolished. A non-age-related premium will be mandatory for all contracts, and pension scheme members will accrue benefits in accordance with the premiums they have paid. This approach will eliminate the redistributive element stemming from the uniform premium system, increase the transparency of pension accrual and provide enhanced alignment with the labour market. The possibility of limiting the tax framework to the pension premium will be examined. When devising the tax framework, the government will keep in mind the need to facilitate adequate pension accrual. • People will continue to share risks. A pension will remain a lifelong payment; people will not face the risk of having no money left if they live longer than expected. • The social partners will develop a new pension contract. The SER has already explored the options for a new pension con...
