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7 août 2017

The Netherlands: trade union wants to put an end to the pension age increase

Trade union FNV started a campaign to put an end to the increase of the state pension age. Since the early 2000s, respective governments have limited the possibilities for early retirement and prolonged the age for pensioners. According to the FNV, the effect has been that the distribution of pensions has become more unequal. The union has formulated a plan with 11 demands for a fair pension policy.

The most important pillars of the Dutch pension system are the general state pension (AOW) and the (mostly industry-wide) employee pensions. In principle, the state pension covers a subsistence-level income for all retired persons and serves as the basis for other (second and third pillar) pensions. This broadly supported state pension provides people with security and ensures that there are very few elderly people in the Netherlands who live below the poverty line.

In the late 1990s, the debate started about the ageing of the Dutch society, followed by political initiatives that had to make the pension system more sustainable. In the years 2000-2005, the main policy became to dismantle existing early retirement schemes and to discourage the use of other pre-pension systems through negative fiscal measures. Moreover, the government decided to raise, step-by-step, starting in 2013, the applicable pension age for the state pension (to 67 years, to be revised in future, depending on life expectancy.) As a result of all these measures, the average retirement age of the Dutch workforce, which was until the years 2000s in line with the average in neighbouring countries (workers retired around the age of 61 years), increased rapidly to 64 years and 5 months in 2015.

This fast increase has had several effects. It turned out that workplaces are not equipped with facilities for elderly workers and occupational health doctors have sound an alarm bell for the situation of elderly workers in arduous jobs. Even employers’ organisation in the metal, installation and building sectors came up with a plea to stop the increase of the pension age, because of the difficulties workers in vulnerable jobs meet reaching the pension on their own. Even more alarming for the trade unions is the increased inequality between rich and poor. Recent research reveals that low-paid and low-skilled workers must continue their job to make ends meet, whilst high earners can leave earlier.         

Trade union FNV has formulated a 11-points plan for a fair retirement. The union invited the employers to integrate these points in a generation pact that can be addressed to the forthcoming coalition government. The key demands in this campaign are:

  • Put an immediate end to the increase of the state pension age;
  • Improvement of the state pension benefits;
  • Introduction of flexible retirement (4 years before/after the statutory pension age);
  • Financial incentives to facilitate the entrance of low-paid workers to such a scheme.
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