Two million Dutch people may have their pension reduced
It seems almost inevitable that just under two million pensioners and working people will face cuts next year retirement and that may also affect pensioners in Thailand. Especially the pension funds in the metal sector, PME and PMT, have had a bad last quarter after the stock market collapse, NOS reports.
According to Eric Uijen, chairman of the PME pension fund, there is an 80 percent chance that his fund's pensions will go down next year. Pension funds have been suffering from the current low interest rates for some time now. They need to set aside more money to meet their future obligations. Pension funds are required to have a funding ratio of at least 104 percent. If that doesn't work out five years in a row, they have to cut back.
The largest pension fund in the Netherlands, civil servant fund ABP with 2,9 million workers and pensioners, cannot rule out the possibility of cuts next year.
No indexation
The five largest funds, with the exception of bpfBouw, already expect that pensions will not rise in the coming years. This means that almost 7 million pensioners and working people will almost certainly not receive an increase in their pension or pension rights again.
Although things seemed to be going just as well for the large pension funds, the last quarter of this year was a huge damper. The stock markets collapsed worldwide and that took a big bite out of the assets of the pension funds.
Source: NOS.nl
Despite the fact that pensions have not been increased for years, and despite the fact that the assets of the pension funds - even after the recent decline - are at record levels, cuts must be made.
There must be a huge hole somewhere in the pension system, through which the money disappears.
A (significantly) larger pot, but more draws from it, who also live much longer than the original calculations were, ensures that less can be drawn from that pot per year of life per participant. That should still be clear to a child.
Yes, Harry, that's what they want you to believe and if they say it often enough, we'll believe it automatically.
But when I look at the young people, many of them are too fat and they eat little fruit and vegetables.
We have gone through a major crisis, but the pension pots have grown considerably in that time.
Didn't you see the black swans program on TV last year, it was explained very well and clearly what happens to our pension money, it makes you cry.
There are a lot of people who earn a lot from that pension system and Draghi keeps interest rates low.
Good for the heavily indebted countries, very bad for us, we pay the price
Those people who are now receiving a pension have paid their contributions for this.
A premium that was high to be able to index pensions.
Living longer will not apply very much to the current generation of pensioners.
It is also doubtful whether this increase in the age at which people die will continue.
Those who survived the world war and the first years afterward will generally have been the strongest in good health.
Whether the people born ten or twenty years later will also reach that age on average is very much the question.
In addition, voluntary termination of life is also becoming increasingly fashionable.
That is also beneficial for the pension funds.
Ruud, I think that (black) hole is in Brussels
Why, a Brussels (and Hague, because if The Hague says 'no' then Brussels can do almost nothing) conspiracy or something? The explanation that we are living longer and longer, that there are more elderly people (and less young stuff), plus a (too) low actuarial interest rate seem to me to be a much better explanation. That needs to be substantiated. 'Brussels is guilty' is not.
No, that's only partly true. The Hague is participating because a reduction in the state pension age must be built into a new pension system. The low actuarial interest rate has been a disadvantage for all funds in recent years due to ECB decisions. The Italian Draghi in particular did not want to give way.
The ECB interest rate is low, but Brussels does not determine which formula we use to calculate our pensions. Pointing to Brussels for anger about pension benefits is just as illogical as pointing to Brussels for the housing market or sales tax. Then you have your tubers sold for lemons. Brussels, the red rag to the bull, the easy excuse not to have to hear about the how and why of pensions, the housing market, etc.
You are wrong. If you want to know something about the - very limited role - of the EU with regard to pensions in the Member States: https://www.rijksoverheid.nl/onderwerpen/pensioen/europese-regels-voor-pensioenen
It's all in the actuarial interest rate used, read my story
The funding ratio is the current assets divided by the present and liabilities in the future
Precisely those obligations in the future are calculated back in a very unfavorable way (actuarial interest rate that is too low).
As a result, those obligations are actually valued too high, resulting in an unfavorable funding ratio, which may lead to cutbacks
If the actuarial interest rate were 4% compared to 1% now, the coverage degree would be at least 30% higher and then you would no longer hear from anyone. In fact, then they lower the premium and we get a generous indexation.
This discount rate is part of the negotiations between the government and trade unions
That actuarial interest rate of 4% has been shamelessly used by the Dutch tax authorities since 2001 to calculate the tax on equity. It has therefore been assumed for almost 20 years that a return of 4% is achieved annually. Well, since 2001, savings rates have rarely been above 1%. So measure with 2 sizes.
Read the message about the funding ratio, Ruud.
The asset managers who invest for pension funds such as ABP, PFZW and pension fund Bouw are receiving increasingly higher bonuses. Performance-related fees increased by 488 million euros to 2 billion euros last year, according to research by consultancy LCP among 222 pension funds.
I'd say report it. The world is wide open to undiscovered financial geniuses. Clarions and applause alongside infinite gratitude from many will be your lifelong portion.
How was that statement again: “the quay is black with the much better knowing mates, who are also stinking jealous of what the current mate receives in (financial) compensation”.
The postman also does his job through wind and weather!
Everything delivered on time and well. What bonus awaits him/her at the end of the year.
Or the pavers who have delivered the Binnenhof fantastically, over which the current helmsman strides with his eternal smile.
A fart from the wrong angle in December and the prices plummet, will the tide turn the ship? Or does the financial genius jump overboard with the cry: Help pensioners, something can still be done!
The real genius does his job, like everyone else, without exorbitant increases and just shows that despite price fluctuations, the assets remain stable or even increase the more than 1100 billion (ABP).
It is not the boards and/or administrators of the pension funds that are causing the possible reduction in payouts. There is no point in pointing the finger in this discussion.
There appears to be a small 1400 billion in the joint greenhouses. With that money you can feed the whole world for a few years. But probably not those few million senior citizens, which they are entitled to and have paid for throughout their working lives, as well as their employers. A few years ago a documentary was broadcast under the title, ¨White swans, black swans¨. there it was explained in no uncertain terms what some pension managers earn annually in salary. About 3 barrels (three hundred thousand and more) floated past my computer screen. Yes, let's get excited about the petty corruption in Thailand, apart from major abuses of course. Conclusion, if you have worked your whole life for about 40 years or so, for a pension that retains its value, and you experience this underhanded business, you can rightly feel screwed. Sad but true. …
7 billion people, 365 days a year, so you thought you could feed someone for 0,55 a day? Where ? ?
€1400 billion / 14 million Dutch people over the age of 67-87, so 20 years = €5000 per year… Schraalhans kitchen master.
The boy next door sold my old car for € 500 more than the highest offer from elsewhere. I tipped him €250. kid happy. Yes, for 3 phone calls… Those who perform a little extra can also catch something extra.
Why don't you do that, investing for those pension funds? Offer your genius services…
Pensions still invest with a profit of around 7 to 8 percent every year, but have to count on a low actuarial interest rate, which makes no sense. Soon they will come up with a casino pension and you will never be sure of your pension on your retirement date, as you are now with the so-called defined contribution pensions.
The cause is the ECB's artificially low interest rates.
People with savings or pensions are the victims.
Just read this info from Omroep Max, the banking world is simply entangled in pension funds, expensive boards and a gambling world that will knock you over: https://www.maxvandaag.nl/sessies/themas/geld-werk-recht/zwarte-zwanen-7-dokken-en-zwijgen/
Thanks Ernst, I've looked at it again, because it was some years ago and my feeling has not changed and still a certain anger comes up when listening to these white collar criminals. I just can't stand injustice. The great self was displayed again and the people concerned were disdained about it. A large clique that covers each other and even at the top political level. You have to keep things warm for future jobs and then the big money must remain available, that is clear to me. You know enough from the responses to the journalist's questions and you don't need a lie detector for that.
What was it like with that private pension provision?
You deposit - often forced in view of the many decisions of the Ministry of Social Affairs about 1964 - money (about 20 to 25%), with which you receive a certain benefit when you retire until your death.
– The pension fund tries to make as much return as possible with the deposited money, but... that has been considerably disappointing in recent years, given the decreased interest rate (HANDY for the common = government loans and... your own mortgage, for example). In other words: a lot is being done made less “profit” with those investments than previously thought.
– It used to be thought that the average age would be around 72 years, but .. thanks to better nutrition, health care, etc.. we are getting older (MUCH more than those few years later, when NOW that retirement age starts).
– Many more people also participate, voluntarily or under the necessary laws, forced.
In other words: nice, that bigger pot, but longer and with more parts, but finder flows into that pot.
Dear Harry, that's not what it's all about. In times when money is splashing up against the plinths, it is not wrong to let all groups benefit. Those now working have been saying for some time that it is impossible to have to work longer than is healthy. Retirees want an inflation index. Why bother with social commitment if you will be sidelined every once in a while? Why waive rights when your own pots are being consumed around you in “higher” regions.
Don't be afraid: there is so much money in the current pension pots that you too can be happy in due course.
Roughly speaking, the pension fund has 2 legs: return on/in ….and investments
The return is unfortunately almost defunct, except with the tax authorities!
Investments: ABP has become too unwieldy an apparatus to respond quickly and adequately to market developments.
People used to think……However: Governing is FORESIGHT . Do not follow medical and pharmaceutical developments, resulting in a longer life.
Share longer and more? My wife passed away unexpectedly before retirement.
Shortly afterwards, the tax authorities showed up to claim the inheritance tax on things that had always been taxed.
I would rewatch the black swan episodes. Then you know how the money is collected and who brings in a lot of money. I cannot tell you all about pensioners. You are dependent on people who know how to play the game and today, despite the science, they quietly continue with their corrupt attitude. Big business who can do without them.
We are the piggy bank that is being emptied, which is why it is also mandatory to pay for a pension with your employer.
They will never abolish that obligation because yes Jacques, many people indeed lose their super luxurious life, we saw them pass by black swans on their yacht or Lamborgini and just laugh and tell how they received millions from pension companies to invest.
And trade unionists who were also in America for a meeting were there for free (candy trip?) because then it turned out that they didn't understand it at all.
The black swans journalist was sent away, he understood
We are being screwed anyway, everyone would benefit from it, well my AOW increases net by 14 euros, but I have 2 pensions that decrease net by 4 euros, so that leaves 10 euros to pay my higher health insurance premium and energy bill. , and then the 3% increase in VAT on daily groceries. rararara.
I do know why, it is generally known that math education in schools is substandard, and all current ministers are much younger than I am, so that's why!!!!!!
My state pension has been reduced by 70 euros
If your circumstances have not changed and you have not received too much in the past, that is not possible.
This is probably because payroll tax is now withheld from you, which you have probably not paid for 2 years because the SVB did not yet apply that change as of 01-01-2015.
As of 01-01-2019 they do that now, hence the € 70 less.
Isn't it about time that working Dutch people took to the streets again, just like in the past, at the end of the sixties to make their voices heard.
Instead of sitting at the computer complaining.
Jan Beute.
Can I then expect a meeting of joint pensioners in Thailand, for example on March 18 next, gathering in Hua Hin at the gates of MarketVillage, to encourage the consultation in the Netherlands that will then start?
That gap lies with the directors with their generous remuneration and pensions. As far as I know, the pensions of the employees at PMT are very well arranged at the expense of the worker and retiree. It will be the same with the others. Much too much is paid to the asset managers, why a bonus they already receive a good salary, etc. And with the external ones it is even worse. Ben
PS in the good times pension contributions were reduced ( at the insistence of the employers ) . And now we are short of money. And the premiums must be increased and the entitlements and pensions must be reduced. Big shame. Bad drivers ( apparently can't look ahead . You always have good times and bad times ( think of the nest egg ). Ben
I really can't be bothered. The pension funds simply have to invest in order to achieve good results in the long term. To start shouting after every bad quarter that maybe pensions should be reduced seems more like sowing panic. The results of investments fluctuate. If the pension funds are put in bank accounts, it will not yield anything at all. Less may already be invested due to regulations of the Dutch Bank. There are also rumors that pension funds would be claimed by the EU. That would be many times worse. The Northern, so-called rich countries, would then also have to transfer their pension funds to the Southern, poor countries. But it is money saved by the workers. Unlike the AOW, which is paid for by the current workers. There seems to be a distressing shortage of professionals in the Netherlands. I would say, government, allow some Thai or Eastern people with a vocational training.
Dear Puuchai Korat
.
The pension funds are not doing badly, 10 years ago when the crisis broke out, the pension pots grew to the sky.
It is Brussels that ensures low interest rates and printing money.
In the past there was gold against the paper money that has been released, it is printed as needed with all the consequences that entails.
We would also suddenly (unforeseen) get older, but given the way of life of young people, I don't believe that, but time will tell.
Then you can't let in unlimited people just to earn money, we will have to be satisfied with less, that alone can save us.
Because whether an Easterner or an African comes in, the space is not there
The whole world cannot be crammed into Western Europe, just read the history books
Without new workers and youth you can say goodbye to your pension money.
Dear Thea,
I advocate labor migration instead of admitting the underprivileged in the Netherlands and Europe for decades and providing shelter and (lifelong) money. This is indeed not possible and we see the results, among other things, in the disproportionate increase of the state pension age. According to actuaries of life insurers, the longer life expectancy is only a few months. However, the government has seen its chance to increase the state pension age by more than 3 years and the end of this is not yet in sight. Now, the AOW is paid by workers, it is a pay-as-you-go system, unlike pensions for which employees and individuals save. So, in order to keep the AOW (out) payable, there must be sufficient participants in the labor market, i.e. enough workers. And the current population growth, mainly due to immigration, does not produce enough participants. Most remain stuck in a benefit situation, so the AOW will prove unaffordable in the long term. This is only possible by filling all vacancies with preferably well-trained workers. And these can now be found in Thailand, for example. There is a glaring shortage of professionals in the Netherlands. A bricklayer can charge € 80 per hour. But I wonder if the Thai would be interested in working in Europe. In any case, the Netherlands/Europe should focus on well-trained professionals.
The Netherlands has well-trained masons, but they all had to leave on a Friday and could come back on Monday as self-employed people for much less salary (take it or leave it), but now the wind has changed again and they are desperately needed, you know that they Those construction workers are still on the sidelines, they would rather hire an Eastern European because he will do it for less with all the consequences that entails, read accidents because they don't speak enough Dutch.
Dear Puuchai,
You don't have to worry about it, luckily!
A retiree has not received any indexation in the past 10 years, roughly a 15 percent decline.
If something goes wrong again, it will be difficult for some Farangs to continue living in Thailand because they can no longer meet the requirements.
Some creative "lawyers" in Pattaya offer a solution from 12.000 baht, so that people can continue to live in Thailand
Dear Mr/Mrs Lowmaat,
I'm not worried about investment results from pension funds, for example, because investments fluctuate, so you can't simply claim on the basis of a lesser quarter that it is inevitable that pensions will fall. We know that there is a chance and that it has already happened. What worries me, at least what worries me, are the measures that are also creeping in for emigrants. Losing all deductions, to name but a few, for people who remain taxable in the Netherlands. The erection of thresholds by the Dutch tax authorities in order to obtain an exemption from payroll tax, for example. They ask to have a form filled out that the Thai tax authorities understandably just won't fill out. Pension funds are also not unaffected in this respect, for example with proof of life. Control is fine, but adjust your administration to the current century. Everyone has whatsapp or line, but the pension funds prefer a piece of paper with a stamp on it than to speak to someone in person (with proof of identity at hand). How much would that save in costs, energy and travel time for emigrants? And certainly those with less good health. I've already raised it with pension authorities a few times, but they don't even respond. They are all just thresholds and they seem to hope that people no longer want to or cannot make the effort, so that they can cut back or no longer pay out.
Also the fact that if you have a Thai relationship you no longer receive a single person's AOW, but a lower (half) married AOW, while you do have the zprg for an entire family. Your Thai partner is of course not entitled to anything. That is not yet incomprehensible, but one should at least pay a single person's state pension. And you have paid 45 years of premium (not the lowest) for that.
However, if it turns out that I would no longer be able to live in Thailand, given the income requirements from the Thai side and the ever-decreasing income from the Netherlands, there is no other option than to return to the Netherlands. Although I could claim a single person's state pension, for example. In addition to possible medical expenses that should then be reimbursed by the Dutch basic insurance, which would now be paid by my international health insurance. In my opinion, all these thresholds will have the opposite effect.
But meanwhile I really enjoy life in Thailand and I feel at home and safe here. When I walk around in public areas and metro stations in Bangkok, for example, I find that there is a much more pleasant atmosphere there than in, for example, Dutch trains and stations, where I am always on my guard and really do not feel safe.
I have been living in Thailand for many years with great pleasure.
That Ned. AOW pensioners have never had it as good as they do now, is Chris' statement
which cannot be discussed in this context. As a volunteer in assistance, I unfortunately have
seen enough old age pensioners and young people end up in the gutter.
But both Thailand and the Netherlands keep coming up with new measures, which do not always come across as clear or sympathetic to the elderly.
The pension funds have never had as much capital as they do now,..however,..against that capital there are future obligations. Those future obligations, so tomorrow, next year, in 5 years, 10 years, etc., are calculated back to this moment. This is called the cash value calculation. Since this is done at the current actuarial interest rate, which is very low and about which there is so much discussion, the result is that those obligations turn out to be very expensive. As a result, the notorious coverage ratio turns out unfavorably.
Funding ratio is assets divided by the present value of liabilities x 100%
If the coverage ratio is above 110%, indexation is allowed and below 104, I thought, in principle, cuts should be made. That's the rough rule, I'll say.
I'm at the abp and checked eea.
In 2018, the apb achieved a negative investment result of 2%, which is due to the poor stock market in the last quarter. The Abp invests approximately 33% of its assets in shares and in the last quarter there was a loss of almost 11%, so a loss of approximately 3,6% on the total assets
Now everyone immediately screams bloody murder, but every investor says investing in shares is something for the long term. To limit myself to the AEX, it stood at 31 on 12/2018/487 and today at 509.
So again a recovery of about 4,5%, but the trend remains erratic, but that's just for equities. In the long run it's probably much better than fixed income investments in bonds or something.
In the past 7 years (2012-2018), abp has achieved a combined return of 52%. So yes, there can and may be a bad quarter or even year.
The main culprit is the current discount rate. For a liability of €1000 over 60 years, with a retroactive interest rate of 3%, €170 must now be available. At an interest rate of 1,5%, that is €410, almost 2,5 times as much (example borrowed from the PFZW site).
Many experts agree that an actuarial interest rate (so the interest rate with which you calculate the future obligations back to now) of 4% is realistic.
If the government applied an actuarial interest rate of 4%, everyone would be lyrical about the results of the pension funds and then generous indexing would be possible.
Moral of the story, it is a big political game of which the citizen is actually the victim.
Just like the predicted improvement in purchasing power in 2019 is just a big lie and no journalist will follow through on it
I dare to say with my head on the chopping block that more than half of the population is going back with the measures taken. But that's another discussion!
Don't forget that the Government has twice taken a big bite out of the ABP pot to make up for the deficits in government expenditure. Hence the name Roverheid. Billions have been stolen.
Well, as a Belgian I am surprised. If the pension funds don't fare well, you're screwed. The amount is fixed by law with us. Are we really that stupid?
Yes, we really are that stupid. Because Belgian pensions are not funded at all!
They are only promises from the government (such as the NL AOW).
In Belgium, only a minority of employees have a supplementary pension (which they call a “pension” in NL).
In Belgium, people talk about pension pillars when talking about pension.
There are four.
First Pillar
Is the Belgian statutory pension (which is called AOW in the Netherlands).
The working generation of the moment must take care of this
The pension you receive depends on your salary, the number of years you worked and the status you had: employee, self-employed person or civil servant.
Second Pillar
Is a supplementary pension (which is called a pension in the Netherlands)
Is through your employer: this is done through a group insurance, a pension fund or a sector pension.
You usually pay part of the premiums yourself, and your employer pays the other part.
The third pillar is the supplementary pension that you accrue yourself in a fiscally advantageous manner
This is done through pension savings and/or long-term savings.
You can also build up the fourth pillar yourself, but without a tax advantage
This can be done through savings accounts, investment funds, insurance products or other solutions. Real estate is also an option.
The more of those pillars you have, the better of course.
We also cut back this year. We are with the abp. Well, not a high amount, approx. 1.50 euros, but still. Retired for 8 years and only going down. The state pension is indeed going up. even with all those rising costs. Sometimes you think I worked for that for 51 years.
I'm sorry, but your pension has not been cut at all this year. It is the tax increase on your pension that makes the net amount slightly lower. It is also not correct that you have nothing left over from the state pension. A single person will have about 32 euros and a couple about 42 euros net.
Never mind that it is scandalous that pensions cannot be increased due to the ridiculous actuarial interest rate imposed on them by the government.
In recent years I have always been surprised and annoyed that Polder Nederland did not come up with a pension solution so much sooner. That of the over-paying and bonus-awarding managers and directors has all been known for much longer. That of an imposed actuarial interest rate that is too low: ditto. That those who work now will only reach their state pension age with health problems: ditto. That an enormous amount of money has been saved: also. That it is time to take political decisions: here you see the cowardice that also resides in the Polder. Current minister Koolmees BV, but also Rutte, who has a long nose at the trade unions. But why is it so quiet, for example at 50Plus? It is time for old and young to speak up and for no longer to stand by and watch how this issue is also explained away. I'll be back in the Netherlands in a few weeks and I'll get involved as best I can. Because one thing is certain: I will not spend 12 months in Thailand every year to shout from a moo job that things have to be different in the Netherlands and the EU. Because that's what you more or less call on yourself. The only way to bring about change is to get involved. And that is what I have seen the least in Thailand with many people.
Retirees have never had it better than the current generation of retirees. In addition to state pension and reasonable to large pension and also an average much larger capital than all generations of pensioners before us TOGETHER.
If you really want to worry: think about your children who often can no longer get a permanent job, can therefore no longer buy their own house, can't accrue a pension (or don't think about it if they are self-employed or digital nomad) and soon have to live on their savings and on the legacy you left behind.
Unfortunately, we will have to be realistic. And that means that you should not expect to be able to make ends meet in your last 20-30 years of life after working for 40-50 years and to have spent only a relatively small part of your income on state pension and pension contributions during that working period. This is only possible if the pension fund achieves attractive returns year after year. Fortunately, those good returns were achieved in most of the years after the last world war, but the years of growth now seem to be over. So the premiums have to go up, we have to work longer and there is also the risk of a discount. That's just the way it is.
However, things can be done differently, such as in the USA where they often still apply an inflation correction to the pension benefits. How do they do that there? They do this by calculating year after year for a return of, in many cases, still 7% over the coming decades. Absurd, of course, and that means that it will soon go completely wrong and the younger generation in particular will be deprived of future pension benefits of any significance. Or the government will step in, but unfortunately the government deficits in the USA are already running out of steam and that will only get worse.
In the Netherlands we can of course also artificially increase the actuarial interest rate and thereby increase pension benefits, but this will probably be at the expense of our children's benefits. And if interest rates on, for example, government bonds rise in the near future, making it possible to raise the actuarial interest rate for that reason, then that is unfortunately no reason to be happy either, because the debt position of many governments and companies has increased as a result of the policy of among other things, the ECB has risen so enormously that it will rain worldwide bankruptcies, causing the return of pension funds to become negative. Or there will be an inflation that the pension fund with increased benefits cannot keep up with.
In other words, we will have to put the consumption to the trade. Or the government will have to cut back heavily and make the released funds available for an increase in state pension benefits. I don't see that happening. Another possibility is of course to increase taxes (and other charges), but then you get French situations.
There is one "light spot" for the financial position of the pension funds, and that is that life expectancy may be estimated too positively. Because if we live shorter lives than is now assumed, there will of course be more to distribute. And of course it is pure guess work to estimate how old a 25-year-old employee will be. Nevertheless, this estimate is of course essential for pension funds (http://www.pensioenpad.nl/sterftetafel.html) but largely based on extrapolating existing trends. Personally, I think that those estimates will turn out to be far too positive, partly because the trend is already reversed in America, for example. And that while Americans pay by far the highest health insurance premiums in the world. More care does not always mean a higher life expectancy. You are responsible for that yourself, at least to a large extent.
It should be clear that the pension directors are not responsible for the chance of reductions. Most pension funds are well-governed and corruption or lavish pay only occur in exceptional cases. In some cases, an absurd amount of money has been spent on hedge funds. Financial specialists who gamble with our money without taking any risk themselves were rewarded excessively. But even the 505 million that ABP spent on this in 2015 was much less than 1% of ABP's assets. You can therefore not hold that responsible for the current precarious situation. It is really the declining growth in Europe in particular that is responsible. We will have to accept it and take it into account. In addition, the Thai baht could rise even further in the coming years. That is of course also watching coffee grounds, but something to take into account.