There have been many wars in Europe where politicians could only promise ‘blood, sweat and tears’. Now there is a war on this continent in which most of the people are being pampered.
Companies and individuals receive an energy surcharge. The basic grant for students will become structural. Civil servants get 10 percent more. You no longer have to pay for a train ticket, because conductors no longer pass by. Childcare will be free. The Netherlands is on course to become world champion football.
And to top it all off, after years of lamentations, the pensioners are served at their beck and call. Construction workers’ pensions will rise by 14.5 percent – the largest increase ever. And on Thursday it was announced that retired civil servants would benefit by 12 percent. It is bizarre, because the war and the energy shortages have caused an enormous destruction of capital. As a result of inflation and rising interest rates, hundreds of billions in bond and equity capital have gone up in smoke in the Netherlands alone.
The pension fund for the construction industry has 800,000 members. But not only this fund makes a generous gesture. It’s an ascending series. Pensions in the care and welfare sector will increase by 6 percent. In retail, it is 10 percent. The pilotage pension fund has announced an increase of 11.3 percent and the ABP, the largest in the Netherlands, one of 12 percent. The increase is 13.6 percent at PNO Media and 14.5 percent at the pension fund for the construction industry. “There is a wave in which an increase of 8 percent, or perhaps even more, may become the norm,” said this newspaper on Thursday.
Rising interest rates mean that pension funds need to keep less cash for their future obligations. The funding ratios – the ratio between liabilities and assets – are rising as a result. In addition, Carola Schouten, the minister who is now responsible for pensions, has determined that pensions may already be increased at a coverage ratio of 105 percent, instead of the previously mandatory 110 percent.
The coverage ratio of the pension fund for the construction industry is over 130 percent. This fund has invested smarter than the other funds. For example, a relatively large proportion of the capital has been invested in real estate, the returns on which have been much higher in recent years than on shares and bonds. And the risk of falling interest rates had also been hedged earlier. The retired construction workers can therefore rub their hands together and, to the chagrin of family and friends, no longer have to do odd jobs in their old age.
Retirees find it quite understandable that they are entitled to the increases, because they were cut precisely at a time when trees grew to the sky and investments made super profits. They therefore bring in their own zip code whopper with a looming recession on New Year’s Eve.
Maybe it sounds cynical. But besides blood, sweat and tears, this war 1,900 kilometers from the battlefield is also one of bread, games and a generous laugh.