Millions of Dutch people will still have to deal with pension cuts, according to a number of large pension funds. There is not enough money in cash to meet the requirements of the government, 7 million Dutch people will feel that in their wallets.
Last month, Minister Koolmees said that reductions were no longer necessary because a final agreement has been reached on a new pension system, which should take effect in 2026. Koolmees also relaxed the funding ratio requirements for this year due to the corona crisis. This goes from 100 percent to 90 percent, but even that 90 percent may not be achieved.
Civil Servants' Fund ABP only has a funding ratio of 85,2 percent (end of June). The fund for care and welfare employees (PFZW) and the Pensioenfonds Metaal en Techniek (PMT) also report funding ratios of less than 90 percent.
The big funds have been in trouble for some time. Last year they all failed to reach the funding ratio of 100 percent. Even then, the minister relaxed the requirements, so that a pension reduction was not forthcoming. Due to the corona crisis, the funding ratios fell even further in the first half of this year. The first quarter in particular was dramatic, due to losses on the stock market and falling interest rates.
Source: NOS.nl
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Known as Khun Peter (62), lives alternately in Apeldoorn and Pattaya. In a relationship with Kanchana for 14 years. Not yet retired, have my own company, something with insurance. Crazy about animals, especially dogs and music.
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If discounts turn out to be the case, then it is time for us to move the elderly en masse to the Malieveld and paralyze The Hague. After years of non-indexation and therefore lagging behind on wage developments, corporate profits and economic progress, coupled with extremely minimal state pension increases due to the minimal increases in the minimum wage (note the more frequent occurrence of the word minimal!), plus the recently concluded pension agreement after 10 (!!) years of negotiations in which expectations have again been raised, it is not acceptable that the purchasing power of the elderly is challenged.
Note: retirees will be portrayed as wealthy and wealthy. “Boomers” who have only benefited from rising prosperity in recent decades. People with only a small pension in addition to their state pension as those who can turn to food banks.
Let's be careful not to be played apart and driven. There is plenty of money in the pension pots of the pension funds. More than 1.500 billion euros. It is absurd to think that because of a crisis such an amount of money is suddenly insufficient to meet future obligations. Against the background of the 750 billion euros that the EU pushes into the economy, of which southern countries receive the necessary subsidies, i.e. free money, it is indigestible that we elderly people pay the bill.
Dear Josef, agree with your argument but the warning to be careful not to be played apart and driven comes too late. The young people have been brainwashed for years with the message that pensioners are playing nice weather from the pension contributions contributed by the currently working people. While the workers were allowed to let the money roll, the elderly had to justify themselves, so to speak, for a holiday with their caravan or a winter stay in Thailand, for example. The Netherlands had a fantastic pension system until, on 1 January 2007, politicians deemed it necessary to introduce an actuarial interest rate of 4%. From about that date, the accrual of pensions stagnated and there was hardly any indexation of existing pensions. Because the profit on investments was not distributed, the content of the joint pension pot rose from 683 billion at the end of 2007 to 1560 billion in the last quarter of 2019. It looks like the stagnation of the economy due to the corona crisis will mean that pensioners will have to pay the bill. For years they have seen economic progress pass them by, but now it is suddenly important that the temporary economic downturn is absorbed in the very short term by lowering pensions. Today it was announced that 750 billion will be put into the European corona recovery fund. To be honest, I wouldn't be surprised if money from the Dutch pension funds is also involved.
The 750 billion in the European recovery fund comes from loans from the capital market. The European Commission is given permission to use the European long-term budget, to which all members contribute annually, as collateral for loans on the capital markets.
I don't know who will lend money at 0% interest in this capital market, but certainly not the pension funds, because then they will have no income from this.
https://www.nrc.nl/nieuws/2020/07/06/het-eu-herstelfonds-wordt-nog-in-elkaar-gezet-maar-nu-al-zijn-velen-ontevreden-a4005116
In the new pension system, the funds are obliged to invest 65% in government bonds that do not yield interest
Ger, in 2015 the ECB (European Central Bank) decided to buy up government and corporate bonds on a large scale, with the result that the interest income from these loans dropped unprecedentedly. However, to this day all Dutch pension funds are obliged, according to the rules of the FTK (Financial Assessment Framework), to invest an average of a quarter of their investment portfolio in these loans that have become virtually worthless. ABP, the largest pension fund in the Netherlands and third in the world ranking, had invested 2016% of its investment portfolio in government bonds in 30, and that was, incomprehensible to an outsider, even increased to 2018% in 40. My remark that I would not be surprised if (compulsory) money from pension funds would go to the European recovery fund was a blank slate, but I am not as adamant as you are that this cannot be the case. Until recently, no one thought it possible that banks would charge negative interest rates.
The pension law drawn up by the government obliges pension funds to maintain enough cover in the form of bonds, so get rid of that law.
Malieveld can better be called Maling field. (we're kidding)
Demonstrations have turned out to be completely pointless, they send the riot police at you with dogs and horses, plans that have already been made are simply continued, there is nothing and no one who can stop the lust for power.
Although the only thing that can be done is not to vote en masse for VVD PVDA CDA D66 and GREEN LINKS, why do people keep falling for this. You get what you want, so if you keep voting for these parties you should also do not complain.
The Netherlands is aging, so that means that there are many elderly people, so many vote for change, but you have to want it and do it
Sometimes I think maybe they mess with the voices? Anyway, I don't trust them at all.
Massively vote for Wilders and Baudet or in that direction, they at least let us know very clearly how they think about pensions in clear Jip and Janneke language and stand up for the 'simple' man, in contrast to the Klavers Jettes and Ruttes and Co who push our country into the abyss, and give away tax money paid by you that could have been better spent for the Dutch. I know that many think differently about this, but that is allowed in a democracy, at least as long as we still have it.
It would clearly have been different if you had been in another pension fund. Some have more than 20% above what is needed to raise pensions annually. The investors of the pension funds are the problem and not the politicians in this case. With your advice for the above, I think the economy is definitely not getting any better and you will really start to feel that in your wallet.
It's time for the elderly to make themselves heard, on to the Malieveld
Josef, going to the Maliveld is not necessary at all. Don't let all retirees who do volunteer work do so for two months. So I mean all volunteer work. In my opinion, this has enormous consequences for many organizations and institutions.
There is so much money in the coffers of the pension funds that the threat is not inconceivable that the investment specialists of the funds will no longer do their utmost.
Only according to the completely unreal “actual rate” there is not enough money in the coffers..
And that only because Rutte CS believes that employers should pay much less pension contributions and is perhaps getting things ready to transfer the funds to banks and insurance companies.
Or even worse, give it away to the EU.
Pension money belongs to the people, not to the government. However, the government decides. They have an eye on that money, at the urgent request of the European Union! It's an insane situation. Just as insane as the theft at the ABP back then. Interest rates are low now, but will rise again someday. The stock markets in the world are also almost at their peak. It is a disgrace that the various pension funds perform so poorly. Under 90%. ING pension fund 130%. According to Lakeman, 500 billion (!) pension money has been hidden away by the Dutch Bank. In short, it stinks on all sides!
Where does the nonsense come from every time that the EU has even one thing to say about the pensions (and state pensions) in the member states? Have just as much to say in this as FIFA, the Olympic Committee and the football club Op Klompen Begonnen: NOTHING!
The same goes for health care and the clothing of the head of state.
Because it is so easy to blame the EU….. Incidentally, politicians also regularly abuse this when, confronted with criticism of their policy, they shout 'Brussels has to do it'. People then 'forget' to add that they themselves agreed to these measures in Brussels.
Right, see answer from a member of the House of Representatives
From: [email protected]>
Sent: Monday 13 February 2017 15:18
Subject: had to from Brussels
Hi Harry,
It is gradual: because the Dutch government decided to adhere to the budget rules of the Eurogroup (no more than 3 percent short), hard measures were taken. The so-called 'Kunduz agreement', an occasional coalition to satisfy “Brussels” about a draft budget for 2013, took the decision to close the care homes. This decision was not reversed by the later cabinet of VVD and PvdA.
See point 2 of the last page of the attached letter:
https://www.eerstekamer.nl/eu/documenteu/pb_eu_c219_aanbeveling_van_de_raad_2/f=/vj2om216j4h9.pdf
In other words: it was not a measure from a vision of society / elderly care, the story was added later and came, but from austerity drive: imposed by “Brussels” (MY addition: following a decision from the EU Council = all heads of government of the Member States together).
Ultimately, you are right when you say that it was a decision in the Netherlands. But it is dictated by the rules surrounding the Euro.
Yours faithfully,
XYZ, Member of Parliament for Welfare and Public Health
And dare to say something NOW, because various (southern) Member States have not even tried from the start to come close to that 60% national debt of GDP or 3% of the budget deficit and therefore now have no money to solve their own disaster. to clean up..
First the Council agrees, then the EU parliament, then all national parliaments, and then it turns out badly, that's what "hullie", "zullie" and "them" have done.
Politics = twist and turn, as it suits THAT moment.
You are right, BUT this is a forum for NL and Belgians in Thailand, so did you really think that they will / can book a ticket so that all those “”elderly people flock to the Malieveld”””
I think that a lot of people are happy when the monthly tip comes in to live on, let alone that they can also go to the Malieveld for a while.
Even the pensioners in NL themselves often have trouble making ends meet, so there is little enthusiasm there to incur costs to go to that Malieveld.
Look, if you now have something to secure things with, like those farmers do, you might still achieve something, but what are those old people supposed to do, sit down on the street for a sit-in demonstration or stop traffic with the walker? No, I'm afraid that willingness to take action is as good as zero despite the unfairness in this one.
This again becomes just a matter of take it or leave it.
Pensioners who have gone to countries with a lower cost of living have nothing to complain about anyway. The AOW is (was) intended to pay the living costs of pensioners IN THE NETHERLANDS. It is high time that the AOW benefits were adjusted to the cost of living in the country of residence. Should be high on the wish list of PVV and FvD with all those state pensioners in Morocco and Turkey.
Shall we then also make the holiday pay flexible and let the amount depend on the holiday destination? Nonsense to write, also in capital letters, that the AOW is intended for maintenance in the Netherlands. Surely you decide for yourself where you want to spend your last years of life. From the age of 50 before the state pension age, you start with an annual accrual of 2%. Whether you work or not, the build-up will continue, but the group of Turks and Moroccans you are referring to will almost all have been brought to the Netherlands as guest workers. Have paid the AOW premium from their salary. Furthermore, it could only be that the Netherlands saves on the fact that people entitled to state pension emigrate. Incidentally, following your reasoning, old age pensioners who would emigrate to Switzerland or Sweden, among others, should receive significantly more.
a) the AOW law dates from 1954: the number of NLe AOW recipients who lived outside the Netherlands was virtually nil. Now different, so why should the state pension law not be adjusted as such? Whether you want to spend it on going out (see Dijsselbloem) etc., in NL or abroad, is your own free choice.
See https://wetten.overheid.nl/BWBR0002221/2020-03-19, art 9 and 9a: can be easily adapted to the cost of living principle
b) Read carefully, and understand the irony behind it. And paying state pension, as a current worker for current state pensioners, is something different than demanding in due course that the same conditions as from the time when you paid yourself still apply.
c) Imagine: AOW based on the same reasoning as payment from your health insurance: costs as incurred abroad, but never higher than 100% NLe costs. I can imagine that a Baudet-Wilders government would just want to introduce it.
d) How could (the economy of) the Netherlands save on this if AOW pensioners emigrate? After all, spending ends up abroad. And if things really go wrong, many Dutch passport holders know how to find their way to the Dutch nursing homes (a raison of €40-80k/yr).
e) this is a theoretical reflection of possibilities with regard to the state old-age pension. Not about the holiday or clothing or ..whatever spending of a private person. By the way: why not? An EU subsidy for those who spend their holiday money elsewhere in the EU than in their own area. Again: with a certain maximum, just like the health care benefit, so trips to… Thailand, Timbuktu, etc. remain a large part of your own money.
What a great idea, Mr. Romijn, adjusting AOW to the cost of living.
Then I no longer have to take out health insurance in Thailand for 500 euros or more per month, or at least not have to pay more myself, the state will insure me again as before for 140-150 euros or the difference will apply.
I no longer have to sit in the scorching heat of 34 degrees, I'm already a heart patient so the temperature can finally go to 21 degrees just like in the Netherlands Oops! "new normal" temperature must be 20 degrees lower, so that's what it will be Air conditioning on at full power.
Can I finally buy some Dutch products in the Supermarket again, cheese and milk and a case of Heineken, etc, high import prices no longer play a role, difference will be adjusted. And so there are many other points that make Thailand not cheap at all in this case. There has been a lot of talk about this on TB in the past.
You say yes, but you don't have to stay in Thailand, that's your own choice, you chose that yourself Well, that's where you got me, Good I say, I leave wife and children go there like a thief in the night run off and go to Switzerland (where I happen to have family), more expensive living than the Netherlands but close to the Netherlands from which those standards are determined, are you also in favor of giving more than the standard state pension to make up for the difference? (NB the above is hypothetical in case there are people who accuse me of leaving women children behind 🙂 )
Well, I know the defenses here on TB by now, you should have taken care of a better pension scheme yourself, it is your own choice to go to another country blah blah etc.
If you belong to the plebs (or are seen that way) you should keep your mouth shut and sit behind the geraniums, or even better die early, preferably a few days before your retirement.
I suspect that you, Mr. Romijn, will not suffer from a reduced pension or will receive it, and then it's easy to talk, well, I've seen this so many times. too sad for words such arguments, there can be so many factors in someone's life that he or she remains at the bottom due to bad luck or illness and origin, then unfortunately you don't have to expect solidarity from a certain class, but all seen too often here on TB.
But I also wish you, Mr. Romijn, a pleasant day, just like everyone else.
The AOW is intended as an old-age basic income.
Where you spend that should not be a standard.
There are government officials who go to live with their partner in Hong Kong on redundancy pay.
They are also not cut.
It is too crazy for words that the government wants to decide where you should spend your old age.
Soon it will come to the point that the returnees to Morocco and Turkey will keep the full pound / EUR of WAO and the natives will be reduced. 🙁
Dear Harry,
The dishonesty of the government disgusts me.
What every retiree decides is separate from this.
Dear Harm,
If 2 million pensioners withdraw the deposited pension money from the bank for 3 months, economic traffic in the Netherlands will come to a grinding halt!
If every Thursday and Friday at least 20.000 pensioners mail to https://www.rijksoverheid.nl/ with questions about pensions, subsidies, etc. Then the government network has a problem and crashes!
Moreover, they cannot legally answer within 6 weeks!
For example, pay waste tax 2 days late, then the municipality must send a reminder, extra work!
This only needs to be done from your seat.
Nice ideas where the government discovers that there are pensioners!
Promises of Koolmees. Yes Yes. He soon comes back from it. Really outrageous.
You are also always cheated by the government.
ABP what a great pension manager.
Fortunately, Rutte has ensured that Dutch pensioners and people still to retire can also go to sleep every night with a good feeling, knowing that although there is no money for indexing pensions (and AOW), they still show solidarity with the poor in South -Europe.
Do wonder how much France will receive of those many billions because that has not yet told the story as far as I know.
What such a Corona is not good for.
I must say Ruttte does laugh a lot
and why it is only guesswork
AOW is regularly indexed, of course. Whether or not to index the pensions is in principle a matter for the relevant pension funds.
AOW is not indexed, but moves on 1 January and 1 July with the increase in the minimum wage. In recent months, some political parties and the FNV have been toying with the idea of raising the minimum wage to €14 per hour as a starting amount. One of the conditions for this was the decoupling of the state pension. Only the Assistance was allowed to move along.
The “poor” in Southern Europe do retire at 55, etc. 🙂
As a board of, among others, the ABP you should be ashamed to be able to see these kinds of messages and to proclaim them even more strongly. When are we going to see people working for us? It seems to have become a game. When will this nonsense come to an end? I do know that the new pension agreement states that guarantees will be forgiven up to the corner, but all parties agreed to this and it did raise expectations, such that the last group of FNV employees also agreed. The old pension agreement could have continued for years and that miserable actuarial interest rate should have been taken off the table long ago. For now and for everyone in the future. Only the cover for freelancers was important and had to be part of a good package, because many will bite the bullet later if they fail to do so. I have been a member of the Pension Preservation Foundation for some time now and advise everyone to read their vision and, as far as I am concerned, to agree with it. It goes too far in this blog to elaborate, but a lawsuit has been filed that, among other things, deals with the fact that Dutch policymakers have acted insufficiently or in contradiction with European law. So that it has already gone wrong at the base and should never happen that way. Anyone can fill in why that lawsuit is not given priority and it continues over and over again. I think so mine. It's not the first time we've been openly mocked. I think it is an illusion to fill the Malieveld with old days. There are quite a few who are resigned and tired of all the hassle of retirement. There will also be little or no support from young people, because they have been set up for years and played off against the elderly who do not know how to get their pension.
Unpalatable.
Making 750 billion euros available for the southern countries (which also have a lower retirement age)
Incorrect again. Have a look on the Internet with “pensions of EU countries”
https://www.businessinsider.nl/pensioen-leeftijd-aantal-jaar-levensverwachting-aow-nederland/
https://www.plusonline.nl/pensioen/wat-is-de-pensioenleeftijd-in-europa
Dear Harry, Status of plusonline is incorrect. Rising retirement age in France is still not agreed due to all the demonstrations. In Italy, the 2019 national budget states that the retirement age will be linked to the sum of age and years worked. If the total is 100, you can retire immediately. Many people there will therefore be able to retire before their 60th birthday. What is also not mentioned is that there is a legal retirement age in many countries, but the actual retirement age is often much lower due to all kinds of schemes. That is also reflected in the statement of business insider.
I am very shocked by this announcement that we elderly are once again in danger of becoming the child of the bill. While it has been said that no discounts were necessary, but as usual in The Hague they often say things that they do not live up to. While they do have money for their pride in the European Union, they seem to have little or no interest in the people in their own country. It is indeed time for those grabbers to be made clear that it is now enough to strip us Dutch people bald.
It is now important that the elderly organize themselves en masse through senior citizens' unions such as ANBO. Pensions are like the emperor's new clothes. If you shout long enough and convincingly that things are going badly, people eventually believe that things are going badly. Since 2008, the large funds have not indexed and the elderly have lost about 22% of their purchasing power. In the same period, the reserves of the pension funds increased from 450 billion to 1.500 billion. In short, pensioners are getting poorer and pension funds are getting richer. This is possible because the money is owned by the participants, but the power of disposal over the money rests with the government. The legislator and De Nederlandsche Bank determine what is paid out and what remains in cash. Although pension funds invest money and make excellent returns on it, calculated over several years, we are talking about 6 to 7%, thanks to a contrived concept, future forward rate, or actuarial interest rate, the government has the option of pretending that no return is being made. They now calculate with 0,3%, or one 20th part of the return that is actually realized. As absurd as this may sound, we all accept this.
The government will never cooperate in actually paying out all that accumulated money, because it is the cork on which the Dutch economy floats. In this system, the pension pots can only grow to astronomical heights, which is one of the reasons why you can present the Netherlands as a prosperous country. Our system is based on capital funding. In addition, you must already have in cash (discounted at 0,3%) what you have to pay out in 60 years. Such a capital funding system is totally unsustainable at such an actuarial interest rate, but it forces us to set aside an insane amount of money and that is what the government wants so badly, because it is a nice counterpart to the mortgage debts of the Dutch. It is also strange, of course, that you are allowed to cut people now, because there would be a theoretical chance that you would otherwise no longer be able to pay out enough in 60 years. Promises to the people of today are less important than those in the future. The new system makes everything even more opaque. It is still based on capital funding and on a new artificial interest rate concept, forecast interest rate. The government can still manipulate as much as they want. Moreover, the indexation backlog that has arisen is crossed out with a large stroke of the pen. So we can officially blow the whistle on that, while in the current system we still have the right to catch up.
The elderly are an easy victim, because they are not a power factor in society. Young people are equally affected, because they also accrue less pension with this actuarial interest rate, but they are hardly concerned with their pension. They mainly look at their current salary, without considering their pension entitlements to be built up. Pension fund managers also have no interest in change, because they collect generous salaries in this system.
In short, we make it happen together. Think what would happen if salaries lost 22% in purchasing power. Then the world was too small. However, the elderly are easily fobbed off with fallacies such as wanting to pocket money at the expense of the younger generation and that pensions are becoming unaffordable because we are getting older (which is no longer the case). An excellent return has been made on the premiums we have paid, which could be used to pay out an equally excellent pension. So don't believe the stories of Messrs Koolmees, Dijsselbloem and Knot and organize yourself and vote for the right parties.
Let the government pay back what Prime Minister Kok skimmed off from the pension fund at the time. Then we can drill out for quite some time.
Let's read back: this paid for the VUT scheme of the former civil servants. The government employees had a non-contributory pension, while those in the private sector had to contribute considerably. That was then corrected by 1 (ONE)%
Former ministers Ed van Thijn (PvdA) of the Interior and Fons van der Stee (CDA) of Finance want to retroactively reduce the pension premium they pay to ABP as a government employer, from 22 to 21 percent. They believe that the fund is rich enough given the large excess reserves at ABP at the time. The PvdA member and the CDA member see 'the need to moderate the development of collective expenditure'.
https://groups.google.com/forum/#!topic/nl.politiek/i7XyOjeztLE
The employees of the government have always contributed to their pension.
Now they can pay tax on it again! Tribute!
Just for a refresher:
70% of the last salary received
Reverted to mid-wage.
Then enter the discount rate
The actuarial interest rate is now released for…?
The pension contribution is first deducted from the salary. Then the tax is calculated. So you do not pay tax on that amount “again”, but you only pay that tax now. If you compare the tax rate at the time you paid premium with the one you pay now, you can probably be happy with that.
Ton, just for your information, it was not Kok but Lubbers who took a grab from the pension pot.
Why do people always look to the left when something goes wrong?
Even now you hear people complain about a left-wing policy, while I think it has been almost 20 years since we had a left-wing government.
Indeed Geert P. Just like all those guest workers from the sixties. Labor party, left! Not at all, it was the VVD that wanted cheap and malleable workers. The PvdA was against, fearing a fall in wages. And the pensions are not arranged by the pocket fillers in politics, but by employees and employers together. Contact your union if you are not satisfied, the government has little to say about it.
https://nl.m.wikipedia.org/wiki/Nederlandse_kabinetten_sinds_de_Tweede_Wereldoorlog
Search well, but you will not find a left cabinet. There are cabinets of which the left is a part, but that is not the same. You can hardly find a left-wing majority in the 2nd Chamber during the Wim Kok period, but then you have to consider D'66 as left-wing. The conclusion cannot be otherwise that the right has always had more influence on policy, or has always been asleep. In both cases a reason for all complainants here never to vote right again.
Unfortunately for those people who have to deal with it, but I fully agree that it is unpalatable.
I have accrued my own pension under my own management and will not experience a disadvantage later when I turn 65. Then my pension starts.
The Dutch government and then VVD with Rutte in the lead gives a gift of 14.5 billion euros to southern countries and also almost 14 billion in loan guarantees. It is crazy for words, Italy and especially northern Italy people have much more equity than the Dutch, the retirement age is also 5 years lower, that also applies to Spain and Portugal.
It is therefore only right that the government will compensate the pensioners, but also the low paid in NL. Now what Rutte is doing is stealing money from the Dutch citizens. The beaming standard only has to be reduced by 100.000 and that also applies to ministers. Prinsjesdag will be very sober for the Dutch citizens, cutbacks, increase taxes etc.etc.
Pensioners, get your rights and especially ABP where the government has already taken out 25 billion guilders for other purposes, and together I believe 44 billion in unpaid premiums if I'm right,
Retirement age in Italy and Spain: please not from the populist own thumb, but from the Internet = reality.
Internet is reality? What nonsense!
Not always the reality, but in this case it is useful to bring the facts to the surface…
We are being fooled by the government and pension funds. The stock markets are almost back to their old level, so where are the losses?!
Do the pension funds actually employ experienced investors?! Don't think so because they invest largely in Funds (funds that invest in funds), where the return is not really optimal, but it is nice and easy for the highly paid so-called "Managers" of the pension funds.
When losses are suffered on the stock market (which was only a few weeks), the Pension funds are the victims, but you do not hear them when the price recovers.
It's not about "losing", but.. how much is in the pot and what are the obligations in return. This is done for future rights and obligations to be 'converted into cash' by means of the 'actual interest rate'. Just ask a 4th grader VWO with economics in his package and he can explain it in great detail.
Digest now = robbery from the pot at the expense of the younger generations.
Dear Harry, the method is clear to everyone. The point here is that since the introduction of the actuarial interest rate in 2007, pension funds have had to 'calculate' for years with a fictitious return, ie that specific actuarial interest rate, in order to determine their future obligations. At the end of each year, it appears that the returns actually achieved are many times higher than the actuarial interest rate. The current actuarial interest rate is 1,3%, while the average return of the pension funds has fluctuated around 6 to 7% for years. Perhaps you can have your pre-university education student calculate the difference in cash value. I can tell you this runs into the hundreds of billions. What you have also seen for years is that, despite the increasing aging of the population, the pension provision at the funds has been rising for years; from around 600 billion in 2007 to almost 1.600 billion now! I dare to say that this will only continue to increase in the coming years. Shortening is therefore complete nonsense! What may be a political factor here is that that huge pension pot is also included in the credit rating of the Netherlands. Of course, the Dutch government would like to keep it at AAA, because that lends itself nicely and cheaply!
Dear Bacchus, the returns of pension funds are largely determined by the returns of fixed-income securities such as government bonds. Since the interest payments for these have fallen in recent years, this will eventually result in the returns of the pension funds falling when the term of existing bonds, etc., expires and bonds with a lower interest payment are exchanged. Then just scrap 40% of the 6 to 7% you mention. This is because when interest rates fall, the value of the bonds rises because they pay a higher interest rate over the term than the market interest rate. If you look at ABP, you see that they invest around 40% in fixed-yield securities.
What you also ignore is that the number of participants in pension funds is also increasing. In addition, the economy is growing and, on average, people earn more than in the past and participants therefore participate in the pension accrual with a larger share of their salary. And you don't know the age structure of the participants of the various funds, it could be that the proportion of older employees is larger than, for example, 20 years ago, and then the accumulated capital is also a lot larger due to these participants. Just 3 factors that also explain the increase in pension funds.
In addition, the story of the AAA rating is the other way around, the pension funds lend to the Dutch government and they have the choice. According to your reasoning, a pension fund would lend risk-free to the Dutch government because the Dutch government borrows from this pension fund. Nice reasoning.
In short, I don't know much about it either, but after some thinking and googling I can give substantiated responses.
https://www.mejudice.nl/artikelen/detail/historisch-rendement-pensioenfondsen-slechte-leidraad-voor-toekomst
Dear Ger-Korat, Read carefully and understand what is being written! The credit rating of S&P, Moody's and Fitch for countries, banks, companies is used by investors worldwide to determine investment risks. The lower the rating, the higher the risk. The level of interest on a government bond, i.e. the interest that the country must pay, is determined by that rating (= risk). Due to the AAA rating, the Netherlands can currently even charge interest instead of paying it. So if you lend money to the Netherlands, you will not receive interest, but you will have to pay interest! This is currently -0,333% on the government loan (bond) of the Netherlands. You will still receive (positive) interest on a government loan from Italy. Italy has to pay around 2,5% on. I say must, because Italy - just like the Netherlands - can also issue a loan with negative interest, but no one will subscribe to it because of its poor rating.
Well, that rating is determined, among other things, by a country's national wealth. That is the money that the state and its citizens own. The assets of the pension funds are therefore also included. To give an insight into the size: The GDP (monetary value of all goods and services produced in 1 year) of the Netherlands is around 950 billion. The pension funds own around 1.560 billion! That is about 66% higher!
Hopefully it is now clear to you that the world is upside down! Investors, including pension funds, can subscribe to a government loan, but they do not determine anything! So it is not the case, as you think, that a pension fund says to the state: You can borrow money from me at 2%, but that the state says: You can lend money to me at minus 0,333%! That's how this world works.
https://www.cbs.nl/nl-nl/achtergrond/2012/42/rente-staatsobligaties-in-bijna-heel-europa-omlaag
https://www.flandersinvestmentandtrade.com/export/landen/nederland/cijfers
https://www.cbs.nl/nl-nl/achtergrond/2012/42/rente-staatsobligaties-in-bijna-heel-europa-omlaag
Then the returns. According to the Financial Assessment Framework, the pension funds must indeed invest part (I don't know the exact percentage) risk-free. This often happens in government bonds that are currently not yielding anything, because you quickly end up with Dutch and German government bonds. However, with the remaining capital they achieve historically very good returns. A 2017 report from the OECD shows that the Netherlands made an average of 5% nominal returns over the previous 8,2 years and 10% over the previous 5,5 years. That includes the mandatory risk-free investments! Even over a longer period, this fluctuates between the 6 to 7% I mentioned.
Political games are also played with these returns. I write 'nominal' returns, because these are again corrected for inflation by politically controlled audit offices, so that returns are slightly lower (-1,5%). What is overlooked is that salaries are (often) indexed for inflation and thus the (percentage) contributions also rise again. This will not run completely 1 to 1, but that correction of 1,5% is therefore too high.
http://www.oecd.org/pensions/pensionmarketsinfocus.htm
In short, shortening is nonsense. The forecast deficits in the future are only determined by that actuarial interest rate that is far too low! The difference between the discount rate and the actual returns is currently almost 5%. On that pension pot of 1.560 billion, that is a gigantic amount per year that is missed in the calculation of future obligations. Pension administrators therefore suggested some time ago to base the actuarial interest rate more on the historical return, for example by using half of the historical return as the actuarial interest rate. With a historical return of 5,5%, this is 2,75%. Compared to the current actuarial interest rate of 1,3%, this saves almost 1,5%. On the total pension provision, this saves 23,4 billion per year in additional provision, so that indexation will probably be possible again.
I doubt your assertion that the number of participants in pension funds will increase. The socio-economic figures show a different picture due to the increase in self-employed persons and temporary contracts. A statistic from De Nederlandsche Bank indicates that since 2002 the number of active participants has been decreasing every year. There is currently some stability, which can be explained by the improving labor market in recent years. The corona crisis will undoubtedly cause a decline again soon.
https://statistiek.dnb.nl/dashboards/pensioenen/index.aspx
Pension fund ABN AMRO has a coverage of 129%.
Pension funds are in a bad way because the corona malaise has not left them untouched. So the free money should also go to the pensions. Can pensioners finally spend a little more?
Last autumn, regulator De Nederlandsche Bank turned against the repeated postponement of pension cuts. “Moving discounts forward means that that bill remains,” said president Klaas Knot. “It will then go to younger generations.”
In other words: if there are no reductions, the elderly will now spend too much money, so that the young will soon have a deficit. Then, as an elderly person, you may want to go to the Malieveld, but then you should not be surprised if there is a group 5x larger of those whose future pension is being taken away. That is why it is better to listen to the calculators of De Nederlandsche Bank, calculation methods are the basis for future pension obligations and you may or may not agree with that, but time will tell and then I prefer a solid calculation method of the DNB than the current call to pay out more and then have larger deficits in the future. Security for the long term.
see the link:
https://www.nrc.nl/nieuws/2020/07/20/pensioenfondsen-herstellen-zich-maar-blijven-in-gevarenzone-a4006517
Dear Gert Korat , the pension is a deferred salary and is ready to be taken up . everyone puts money aside for your pension so you don't pay my pension you only pay for your own pension. the premiums you mean are intended for the state pension, a mistake that is masked by 90 percent of the people
Dear Ger Korat, what you are doing is what many regret and that is playing the old against the young. This has been going on for years and will continue. That ridiculous actuarial interest rate is the problem of all problems, but it has been set up to allow other interests to prevail. Interests that do not belong to pensioners who depend on their pension. Please stop with that way of sowing unrest and do not support the big money and the accountants of the Dutch bank. All secret agendas that will never become visible because then the country would be too small. By the way, speaking of calculations, when I received a pension I was asked for a calculation, in order to check or at least check whether this was determined correctly, until now I have never received a definite answer from the ABP. You just have to assume what is determined for you is correct. Yes, that's how you are treated. You only get information based on what people want to say. What would be the reason for this? But the feeling of being squeaked in your old age is something that should not be shared with me and of course anyone else in the same position, but that is the order of the day.
For example, if 7 million pensioners only miss €10 a month, the psychological effect on the entire NL economy will be extremely large. After all, if 7 million people “sit on their money” as a fright effect (that's almost 50% of the country), the entire business community will come to a standstill…!!!
This is the specter of the NL government, and I therefore suspect that they do not dare to allow discounts to come to this point…!!
It is just like with the RIVM calculation models. The outcome depends on the data you put into it. So you can manipulate the outcome. In the calculations of the total future obligation, an actuarial interest rate of just under 0% is used, while the pension funds make approximately 7%. At that 0% you will fall short and then Mr. Knot thinks you should cut. If you would calculate the obligation at a percentage of 4%, which was common for life insurance years ago, then there is enough money. There is then always a margin of 3% compared to the actual return achieved by the funds and with which you can offset a disappointing return in any year. So you can make it very complicated by dragging in all sorts of things (Mr Koolmees) but 1+1 never becomes 3
“the pension funds make about 7%” Where do you get that from? Maybe a few years, but with pensions one has to think 40 years back and 40 years ahead.
Those who had invested independently in Belgium: Union Minière, Dexia, Fortis, or in NL: Werkspoor, Verolme, Fokker, Fortis, SNS, …
Pension fund returns are easy to find on the internet. Perhaps your pre-university education student can calculate for you how that 6 – 7% comes about.
NOS.nl is honking something far ahead of the troops, which is not at all certain yet!
I consult this topic daily on various media and nothing is what it is!
Some even state that 2021 remains unchanged!
Try to respond to various associations of senior citizens, who can jointly make a statement, or to political parties that say they are involved in this.
If you still want to respond: https://www.rijksoverheid.nl/
Don't panic people, these figures are out of date, in May the pension funds were in bad shape because the AEX had taken a significant hit, we are now almost at 600 points again.
It is almost impossible to cut it.
Please don't talk to each other about fear, read the pension agreement carefully and come to the conclusion that we are better off than in the old system with the discount rate.
Dear all and pensioner
It makes me sick of this cabinet that cheats with our money
On this side I have been ready for society for 52 years
And what does society do for us just picking
Giving something with the right hand and taking back everything with the left hand everything goes abroad and the Netherlands is again the best boy in the class and tall Jan Rutte does not pull the wallet from himself but ours
But in The Hague they get 2 tons a year So they will care what we have to spend and whether we can pay the bills and now they put everything on the corona but the people themselves do that they don't follow the rules go on vacation come back sick and the elderly and we the pensioner are usually, as always, the child of the bill we cannot buy an electric car with our pension. Long live the VVD they are not going to give and pay to other countries and then they will come and collect it from us on their pension.
“Served society for 52 years “… And? ? Didn't you get a salary for that?
Oh, you mean: I then paid for the former AOW pensioners, and I assume that the current workers do the same for me. With the continuous “ageing” = more state pensioners per worker, this could change quickly.
Whether you have invested enough privately with your pension premium… is another story.
Incidentally, very little of it goes abroad: maybe some commission, but NOTHING is transferred to the EU.
Salaries “The Hague”: min-pres: € 170k, so less than many director of a BV A 2nd Member of Parliament total € 116k, see https://www.parlement.com/id/vh8lnhrrs0qo/inkomen_tweede_kamerlid
So where do you get those 2 tons again…certainly poor internet searching and reading skills, or complaining for the sake of complaining?
You could have done something about it yourself that you think that your income is too low: there are several people who, in addition to a family via HAVO and Uni resp. evening MBO / HBO ( yes, 10-12 years ! ) instead of watching TV a better job and income have come.
I can't make it more ironic.
Director Gerard van Olphen ABP (you know from the pension fund civil servants!) € 490K excl.
salary increase and div. payment
Ditto Edwin Velzen (ABP) 460K (only working for 3 years!) and various "employees" over 400K.
Do you know the 7-part series “Black Swans?” (Cees van Grimmen) An eye opener!
Sorry, Cees Grimbergen
Harry, this story is not about the state pension, but about possible reductions in pension benefits. A pay-as-you-go system has been in place for the AOW for many years. If you believe that current generations should no longer have anything to do with this, as previous generations paid for the state pensioners of the time, then raise this system politically and leave it out of the discussion. Actually, I had planned not to respond to comments like yours because only "technical" arguments are presented. That is not the point, it is about the argument that you cannot unilaterally dupe a single group in society. What would you say if Rutte announced that he would reduce all wages and salaries of (semi-) government employees by a few percent because the loans from the EU recovery fund simply have to be repaid. Don't start shouting that civil servants receive an excellent fee, people from environmental services and enforcement/supervision are on a low scale.
How would you feel if you didn't get a raise for 12 years. Ask yourself that question first and then comment . Do you think your reaction will be different?
Within that pot of 1500 billion euros, a large chunk has shifted from the elderly to the young, because according to Koolmees, the already retired in NL have done very well compared to other European countries, but I do not understand what that comparison is about??? pension is deferred salary and therefore nothing needs to be compared.
The fact that no indexation will take place, which also applies to the pension accrual of those still working, is simply pure theft.
The 90% funding ratio is therefore simply not correct, because it is calculated using the actuarial interest rate and not the interest actually received or the income from investments.
Then another pot is set up to absorb calamities, including the part that has been saved for pensioners within that 1500 billion, and so there is no indexation, not even with retroactive effect, nothing has been added for 12 years.
Koolmees will not be bothered by that!!! D66 minister therefore unreliable in advance!!!
So mortgages go down.
When do you first think about your own people and only then give money away
ABP itself just writes at about 14:30 PM:
Financial position of ABP slightly improved, chance of pension reduction in 2021 real.
Let me not get involved in the discussion where rigidity predominates, but just a number.
My parents bought a doorzon house in 1960 for 11000 guilders. According to the calculator of the International Institute of Social History, this would now have a value of 33000 euros.
The house value is currently well over 2 tons of euros.
Our neighbor was a cashier until his retirement and also bought such a house in 1960. Had 5 children and had to make do with his non-working wife, but when the first child had left home, the luxury and the long journeys came .
These are 2 homeowners, but how did the tenants fare? Maximum rent increase, rent protection….where has the money gone that they could save instead of putting it into the house?
Perhaps an economist can explain why the buyers of the past are now relatively well off despite the money being in the bricks (both are not complaining and not even after insisting to be honest).
They were the forerunner of the boomers, so where did it go wrong with the boomers who apparently missed the boat. Is it complaining for the sake of complaining or have some lived too much?
It is of course also possible that they were in a situation such as now. Can rent for 1250 euros but cannot buy for 900 euros repayment.
Pension is only a pittance but sounds nice, other choices may have been better and that is afterwards and if you want to defend that, that is of course allowed.
http://www.iisg.nl/hpw/calculate2-nl.php
In my opinion, it is also important from which pension fund you receive your pension, because the ABN AMRO pension fund has a policy coverage of about 129%, so I assume those people receive an increase every year.
So not like, for example, the ABP below 90%, so it can also be done differently.
see that Italy gets 209 billion and the Dutch people have to hand in on their pension ,,, scandalous !!!
Boris Johnson laughs and is happy to be out of the EU.
the money is now for his own people and I can only agree with him.
I also only have a low pension and calculated I can live on my own pension for 23 years I am now 66 years old what would you shorten my pension
Bunch of thieves.
It's nice that the FNV has given their approval now the Dutchman is being squeezed even further.
It is the people who have worked hard to grow the Netherlands and have made it as intended to make it free and beautiful, but the gentlemen want to fill their own bank account on the backs of the elderly. Is there no one who can stop this? The pension funds have a sloppy 1500 billion in cash, about 32 billion is spent on pensions, but 98 billion comes in, which is 3 times as much as what goes out, and they are still complaining that there is not enough in the cash.
People who would become rich? Have beautiful offices made for whom? Pay high salaries to themselves? Whose money is that who saved it? They invest it with someone else's money and risks are not looked at very carefully. Give the elderly what they are entitled to and ensure a stable pension fund that is not dependent on the ups and downs of the stock markets.
And our unions watched it and let it happen. Been a member of FNV for 42 years but now retired early. Stopped membership because the importance of the pensioners is not valued.
Member of the ANBO as of 01-09-2020!
Just this:
Billions sent to the southern countries just now.
Retirement age there……
Well 60 55 58.
sosss
Consult your sources first, then call if necessary. Retirement age Greece 67, Italy 66, Spain and Portugal 65. In almost all countries this will increase in the coming years. 60 or lower does not occur in Europe. The link to the facts is in a response from Harry Romeijn (sorry if I spell it wrong) somewhere above, so you didn't have to look far.
Just the reason that ABP is in a bad position, seized into the cash of 32 billion by cabinets Lubbers, would now be worth 80 billion, and ABP is at 106% coverage: https://pensioenfeiten.nl/2019/09/21/de-pensioenroof-de-vereniging-pensioenverlies-neemt-het-initiatief-tot-een-rechtszaak-tegen-de-staat/
It's nice to hear everyone is complaining, farmers, healthcare workers, pensioners, self-employed people. But what do we do?? Whining, sailing, especially NOT voting makes no sense anyway. This way, the Netherlands will also get the government it deserves.
So your own fault, big bump.
Received a newsletter from my pension fund (PMT) today stating that the funding ratio had dropped to just under 90 percent thanks to the corona, but is now rising again.
According to min. Koolmees and my pension fund, nothing will be cut this year if the funding ratio remains above 90 percent.
Why this mood making on this blog I do not understand at all.
If you receive your newsletter one of these days you can read it yourself.
Ralph
What do you mean mood making??? 12 years no indexation is not nothing!!! that's just theft of deferred wages. Call it mood swings!!! if you are already satisfied if your pension is not cut, fine, but I am missing more than 6000 euros, and I would really like to have that!!!
Have a good night's sleep!!!
By mood-setting I mean that it is stated here that there will certainly be cuts and that this is not the case for the time being, that is called being ahead of the facts and can sow unrest.
Good read and stick to the facts, thanks
I will stay awake and stick to the facts and hopefully not get it to my heart so that I can enjoy my pension that has not yet been cut.
Good day dear people.
Ralph
They forgot to agree that there will be no cuts until 2026. The old actuarial interest rate now applies in the transitional period, but has been adjusted. Namely 90%. Bunch …….!