The new pension law is a fact, but it may take years before it is noticeable. Seven questions to chairman Ger Jaarsma of the Pension Federation, the representative of 166 pension funds.
Very succinctly: pension funds will divide their enormous assets of 1500 billion euros into millions of personal pension pots. Before 2028, the personal pension pots from which the pension is paid must have been realized.
Am I now inundated with e-mails and letters from my pension fund explaining the new system?
,,No definitely not. What pension funds are doing now is sending letters about risk appetite. The new law states that pension funds must ask participants what risks they are willing to take. The answers should be taken into account when deciding how to invest for each age group. That’s all you notice now. After the summer, communication about the new law will start. But actually noticing that something is changing will only take a year and a half when the first pension funds make the switch to the new system.”
“In the new law we have the solidarity and flexible premium scheme. It is now up to trade unions and employers to determine which scheme will be used. In some cases it has already been determined. The majority opts for the solidarity scheme.” With the solidarity scheme, the risks are shared collectively and the pension is more stable. With the flexible variant you can determine the risks yourself.
What can I do if I do not agree with the new regulation?
,,Not so much. You cannot object to the amendment to the law. You also cannot lodge an objection against the fact that your pension fund introduces the new scheme or against the chosen contribution scheme. Later, of course. If you think that too little has been transferred from the old large pension pot to your personal pension pot, you can lodge an objection.”
Will it rain objections?
“We have been working on the new system for some time now. Pension funds are continuously improving their data on which the distribution is based. And before the distribution to virtual personal pension pots takes place, De Nederlandsche Bank and the Netherlands Authority for the Financial Markets will also look into it. They must approve the distribution. You can count on the calculation you eventually get to be correct.”
And if I don’t agree?
“There will be an external disputes committee, which is part of the law, in order not to put too much pressure on the judiciary. But how many complaints will there be? Tens, hundreds, thousands, tens of thousands? We actually have no idea. What we do know is that 80 to 90 percent of retirees and working people who accrue pension belong to the ‘silent middle’. They’re not that into it at all. They have something like: social partners, supervisors, pension funds will undoubtedly ensure a good arrangement. They have always done so and will continue to do so in the future. There are two small groups of diehard supporters and opponents. They stir on social media, but they are only small groups. The majority of people count on having sufficient certainties built in. And that’s how it is.”
There are two small groups of diehard supporters and opponents. They stir on social media, but they are only small groups
Ger Jaarsma, Pension Federation
So nothing will go wrong?
“We are facing a huge operation. Our 166 pension funds have to make a distribution among millions of people. I do not guarantee that nothing will go wrong, someone may be wrong in the system, for example because a divorce has not been passed on, so that the calculation is not correct. But then there is financial room to make up for that.”
How big is the personal pension pot?
“There is nothing to say about that. That differs per pension fund and how much pension has been accrued. There should be a distribution key according to age. A pensioner should actually get what he has now and preferably a little more. A young person does not need to receive such a large share, because he still has an investment horizon of several decades. The group 45 to 67 is in the middle. Their pot of money cannot be invested for very long, so they must receive a larger share in order to still end up with a good pension. Pension funds will therefore look at each age group. How much money will eventually end up in your pension pot can only be said when the pension fund transfers to the new system.”
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