The value of the pension decreases for another 10 years
The civil servants' pension fund ABP and the pension fund Zorg en Welzijn say that they will not be able to index their pensions for the next ten years. This means that pensions will not grow in line with inflation, as a result of which the pension for pensioners will be worth less and that working people will accrue less pension.
According to the pension funds, this is due to stricter rules that the House of Representatives will probably agree to. They prescribe that funds must build up higher financial buffers before they are allowed to index. Due to the historically low interest rates, it is now very difficult to build up those buffers.
Pension consultancy Mercer expects that most pension funds will be able to partially index again in 2 to 3 years, but that full indexation may take another 10 years.
In recent years, many pensions have hardly been indexed. As a result, the civil servants fund has incurred a pension arrears of more than 9 percent and the pension fund Zorg en Welzijn of more than 12 percent. The pension funds expect these arrears to increase even further in the coming years. Exactly how much the pensions will be worth less in the coming years is still unknown and depends on inflation and the development of the economy.
That it will be considerable is certain according to the pension funds. “It can be up to 20 percent behind, so that is quite a lot,” says Peter Borgdorff, director of the Zorg en Welzijn pension fund.
Source: NOS.nl
The government should not interfere with indexation at pension funds;
they can do that themselves. A far-reaching paternalistic attitude; we know
what is good for the citizen! Very bad if the House of Representatives agrees to this.
Inge
The pension pots are already overflowing at the moment, then they refuse to tell people that in 15 to 20 years the entire baby boom from just after the Second World War will have died and therefore much less will have to be paid out.
Why is this not included in all calculations? Perhaps because it is made more difficult for the state to reach into the pension pots.
Chatter in space. Just look at coverage percentages that have dropped significantly in the last month. Fattening up the pension funds is quite good, but that should not be arranged by the government again by decree.
A big problem is in the administration. In my profession, a pension fund was set up around 1974. Before that, everyone had to arrange for themselves to build up something for after the employment was terminated. A considerable number of colleagues were against this, but in the end it was adopted and immediately became mandatory, also for those who had already made arrangements. I witnessed a harrowing example up close. A couple of friends, both colleagues, ran their practice together. The first year the premium to be paid was f.6000, and they both had to pay that. There were protests: their main argument was: if we both die, we no longer need a pension or a widow's pension and if one of us dies, the other can continue to work. That was not accepted. In the end, the only thing that could be achieved was: one pays the full premium, the other only the administration costs. And these costs turned out to be f. 3600: 60% of the premium to be paid!
Now I get a pension, at least for the years that I worked in the Netherlands. The last 5 years have not been indexed, but this year the pension has been cut by 3%.
Fortunately, I have also built up some reserves myself, because in the last 8 years the pension and AOW income have fallen by 35%.
Saving yourself and investing carefully is the solution.
This entire operation is no more than a dirty austerity measure by this cabinet. There are currently 1.200 billion or 1,2 trillion (1.200.000.000.000) euros in the pension pots, which is approximately 75.000 euros per inhabitant of the Netherlands from baby to very elderly! In addition to realizing blunt cutbacks, banks, insurance companies and investment companies in particular benefit greatly from this measure. Given the fact that there is a considerable lobby from financial institutions in The Hague and Brussels, it is very likely that this has partly determined the policy of this government. Finally, there are also some commissions to be distributed! What people in The Hague apparently do not realize or do not want to realize is that they will eventually shoot themselves into the tax base. If the aging population really takes hold, as this cabinet likes to make plausible, pensions will be tens of percent lower and, with it, tax revenues as well. I would be surprised if The Hague already takes this into account in their long-term projections. So it will be saved again for future generations!
It is becoming clear that pension and state pension are additions to what you save yourself in the bank, in an old sock or with your own house. And if you cannot save yourself, then you are a poor person after your 65-67-72 e. Don't count on the jackpot in the state lottery because it's mine.
The pension funds have enough money.
If all the money in the pension fund could be distributed among the current participants (in fact, the owners of all this money), everyone could live in a villa with a butler.
The problem is that the government (and probably the board of the pension fund also) wants the assets in the pension fund to be maintained forever.
That capital was once deposited as a premium, but it will never be paid out as a pension.
The importance of the money in those pension funds for the government is that those funds finance the government by buying up government bonds.