Members of the pensions industry in the Netherlands have written to the House of Representatives (HoR) in support of the Future Pensions Act and to refute claims that the new pension system will be worse for retirees.

The authors noted that some media outlets had painted the picture that the new system would be unfavourable for pensioners.

“We want to expressly contradict that,” the letter stated. “If there is a buffer, it will be the current retirees who will benefit from the entry.

“The buffer will, at least partially, be used immediately for higher pension benefits.”

The letter writers, which included the chairs of the five largest pension funds in the Netherlands, explained why they believed the current system no longer works.

They said that a guaranteed pension can only be maintained through high buffers under the current system; so high that indexing becomes difficult.

These buffers would no longer be required under the Future Pensions Act, and this creates an earlier opportunity to increase pensions, which the letter argued was extremely important, especially in the current environment of high inflation.

The authors added that risk sharing remained paramount in the Future Pensions Act, which is what “has always made our system so strong, and it will remain so”.

They added that recent research had shown that pensions are expected to be higher under the new system, while the current system may lead to comparatively bad outcomes in the event of poor economic developments.

'Every capital-backed system has difficulty with low interest rates, high inflation and disappointing returns,” the letter continued.

“Neither the current nor the new regime is able to cope with the current levels of inflation. That is why it is so important that the solidary contribution scheme assesses whether the contribution is sufficient to achieve the pension objective.”

It also pointed to the fact that the Future Pensions Act has personal pension assets, which will offer the opportunity to assign members personally appropriate investment risks that match their ages.

The letter was signed by the chairs of ABP, APG, PFZW, PMT, PME, and Pensioenfonds Bouw, and the CEO of PGGM.

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