Collectivity and solidarity will disappear and members will feel it in their wallets

Allowing people to vote on their own accrued pension assets sounds like a nice idea. But the plan fractures the important pillars of collectivity and solidarity that underpin our pension system. It will harm the pensions of all workers who are accruing or have accrued a pension as well as those of pensioners. What’s more, the plan has major implications for their administration and costs. 

That sounds crazy. How can a ‘simple’ referendum that the NSC and BBB are talking about – whether or not to transition to the new pension rules – be so bad for the collective and for the individual? I will explain a number of reasons why. 

Collectivity and solidarity are two key pillars on which our pension system rests. This has been the case for years now and will continue to be so in the new pension system. We all share the returns, but also the risks. The law assumes that all accrued pensions will go across to the new pension system, i.e. they will all be integrated, precisely because the pillars of collectivity and solidarity will then be retained. We are not taking this integration lightly. We are pursuing it only after extensive research, weighing up the options and concluding that this may be more favourable for all workers who are accruing or have accrued a pension and for the pensioners within a pension fund. The integration and the distribution of the assets will only take place if this is balanced (fair) for everyone.

The plan put forward by the NSC and BBB will make it impossible, or only possible in part, to carry out this integration, and will create various groups within the pension fund, making it harder to share returns and risks. The situation will be unfathomable for workers. They will remain in the old system with the assets they have already accrued and will accrue future assets under the rules of the new system. This means that they will not enjoy many of the advantages of the new system and will continue to suffer from all the disadvantages of the old system. All these effects are directly detrimental to the accrual of pensions for workers and to the pensions of pensioners. The plan will hit our members directly in their wallets. 

It will also mean that pension funds will have to juggle two administrative systems for decades. This will cost money directly, which will then not go to members. And, in the long term too, when there are fewer and fewer members in the old system, the administrative costs per member will keep on rising. 

My conclusion is clear: going ahead with a referendum will ultimately lead to two groups of members and pensioners. Administrative costs will go up, as will the risks for members, while the return will be lower. Moreover, it will be impossible to compensate workers between roughly 40 and 60 years of age using buffers released. It will largely be down to employers to foot the bill, placing downward pressure on wages for today’s employees for years to come. As a result, the financial impact on the wallet will be felt directly by workers and pensioners. Everyone will be worse off. 

Read more about this in the joint position of the largest pension funds in the Netherlands (pdf, in Dutch).

Eric Uijen

Update 13 March 2025
The plan put forward by the NSC and BBB received the most negative recommendation that the Council of State can give on 13 March (‘dictum D’). If there is any news about the referendum, we will update this page.

Update 10 April 2025
In response to the negative recommendation on their earlier plan, NSC and BBB will file a new proposal. They want workers and pensioners to be able to individually object on transitioning to the new pension rules. The treatment by the House of Representatives is set to take place in the week of 21 April as yet.