The new pension system is coming. After fifteen years of social discussions, a polder agreement between employers and trade unions and more than 125 hours of political debates, the Senate agreed on Tuesday evening, with just under a two-thirds majority. This is the biggest pension change since 1954.
But the debate did not end peacefully at all: in the final phase, two sensitive constitutional issues suddenly arose, which led to new, hours-long discussions in the Senate on Tuesday during the day. The most pressing issue is: does this pension law require a two-thirds majority?
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The law provides that employees receive personal pension pots between 2024 and 2028, in which the capital they have built up now is central. Promises about the amount of the future benefit disappear. In addition, pension funds no longer need to maintain large financial reserves. As a result, people will sooner see investment gains and losses reflected in their pension pot or benefits.
In addition to the four government parties VVD, D66, CDA and ChristenUnie, the opposition parties PvdA, GroenLinks and SGP also voted in favor of this on Tuesday evening.
Letter from professors
That a two-thirds majority would be required for the pension law was first suggested last week by SP senator Tiny Kox. At that time he was only supported by other political opponents of the pension law, such as 50Plus and PVV.
But on Monday he was supported by three professors of constitutional law, who at the request of SP and 50Plus wrote an open letter to the Senate. Wim Voermans, Paul Bovend’Eert and Joost Sillen pointed out that the pension law contains a passage that deals with the pension of politicians. And for any adjustment of the salary or pension of politicians, a two-thirds majority is needed, they argue.
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They refer to Article 63 of the Constitution. It states that ‘financial provisions’ of politicians, including their pensions, may only be changed with a two-thirds majority. This article was once devised to prevent politicians from favoring themselves too easily.
The reasoning of Minister Carola Schouten (Pensions, ChristenUnie) is exactly the other way around. This passage is in the pension law precisely to prevent a two-thirds majority being needed, she says. In concrete terms, this passage stipulates that the pension of ‘political office bearers’, such as members of the House of Representatives and aldermen, will not be affected by the amendments to the pension law.
The intention is that a separate law will be introduced later for political pensions, which must receive a two-thirds majority.
Not new
The government had already included this explanation in the explanatory memorandum to the law. The Council of State made no comment on this in its advice on the law, Schouten noted. She also pointed out that her interpretation is not new. She listed all kinds of previous legislative changes that made minor, purely technical changes to politicians’ pensions. In those cases, the House of Representatives and the Senate never opted for a vote with a two-thirds majority.
That argument is relevant, says Tom Barkhuysen, lawyer and professor of constitutional and administrative law at Leiden University. “Precedents matter in constitutional law.” And ultimately, he says, the House of Representatives and the Senate themselves determine how the Constitution should be interpreted. “We do not yet have a judicial review against the Constitution.”
Voermans, Bovend’Eert and Sillen believe that the Constitution is clear: it makes no distinction between technical and substantive changes, they write.
The Senate followed the minister’s explanation by a large majority: only the parties that are against the law did not. SGP senator Peter Schalk read the Constitution article again in its entirety and emphasized that the text speaks of “financial provisions” of politicians. “That is really different from a technical change as proposed here. The financial provision of members of the House of Representatives, for example, remains unchanged.”
Double caps
Professor Bovend’Eert had another comment on the pension debate: in NRC he argued that the members of the Senate Ria Oomen (CDA), Henriëtte Prast (PvdD) and Paul Rosenmöller (GroenLinks) should abstain from voting because they are involved in a pension fund.
Oomen and Rosenmöller are on the board of a pension fund, Prast is a member of the supervisory board of a pension insurer. There is ‘(the appearance of) a conflict of interest here,’ concluded Bovend’Eert. A fourth senator did not name the professor: Martin van Rooijen of 50Plus is a member of the ‘accountability body’ of pension fund ABP.
The fact that a senator works in the relevant sector, for example as a pension fund manager, is not in itself a problem, says Professor Barkhuysen. “You have to look at it on a case-by-case basis,” he says. The most important question is: are pension funds, or specifically the pension fund of this senator, benefited or disadvantaged by the bill? In other words: does the senator have a clear interest in the law as a result?
The fact that senators have practical experience is precisely how the Senate is intended, says Barkhuysen “With part-time members who know all kinds of sectors of society.” You can also see the benefit of that, he says. “I prefer to see a pension fund manager who participates in the discussion and votes on this law than someone who has no knowledge of the matter. Unless there is an advantage.”
In the end, this issue was only discussed briefly in the Senate. The four senators with a retirement position all voted on the law, entirely along their party line. Two for, two against.