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The Federation’s director, Gerard Riemen, said DB arrangements had become “too complicated” and that explaining to participants how the system worked was now “impossible”.
Even though the Dutch pensions system is widely considered one of the world’s best, participants are increasingly seeing their pension rights being eroded while still having to pay high contributions, he said.
Riemen also cited the increasing rarity of indexation and the reduction of tax-facilitated annual pensions accrual.
Riemen recommended switching from DB arrangements to collective defined contribution plans, where the risks of investment, inflation, interest rates and longevity would be shared. Under current Dutch legislation, Riemen’s proposed pension arrangements would not yet be possible. He said, however, that the Federation was already assessing the options of a pension plan based on a combination of paid premiums and risk sharing.
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