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Minister Koolmees postpones possible pension discounts by one year

2019-11-19T14:07:56.038Z

The pension funds that are currently in a bad position and probably have to shorten their pensions next year, will receive a one-year delay to improve their financial position, writes Minister Wouter Koolmees of Social Affairs to the House of Representatives on Tuesday.



The pension funds that are currently in a bad position and probably have to shorten their pensions next year, will receive a one-year delay to improve their financial position, writes Minister Wouter Koolmees of Social Affairs to the House of Representatives on Tuesday.

If nothing happens, 7.8 million participants at 27 pension funds run the risk that their pensions will be cut. With the intervention of Koolmees, this also applies to six hundred thousand participants at four funds.

"Discounts are therefore expected for a large part of the next year," writes Koolmees.

In June, the government signed a Pension Agreement with employers and the trade unions. The system is being renewed and the rules for raising and lowering pensions are being relaxed. But the situation with many pension funds has deteriorated in recent months.

As a result, the government was under pressure to do something about the discounts. The largest trade union FNV announced actions and opposition parties GroenLinks and PvdA, needed for a majority in the Senate for the pension plans, also do not want the benefits to be cut.

Koolmees says that he clearly understands the wish of the parties involved not to shorten. "However, it is good to realize that within the current system discounts are needed to be able to deliver on the promise made to all participants," writes the minister.

Initially, the entire House did not want any 'unnecessary discounts', but in the meantime most parties have adjusted that requirement to no discounts at all for the coming year.

Pension funds mainly suffer from the low and now even negative interest rates. In addition, the so-called discount interest rate is affecting them. Funds must calculate their assets with this discount rate. The lower the interest, the more money funds must have in cash.

PVV, SP and 50PLUS therefore want to increase this discount rate so that pension funds have more money on paper, but Koolmees does not find this a solution for the problems. "Increasing the actuarial interest rate means that we are already distributing returns for which we do not know whether we will achieve them," writes Koolmees.

Source: nunl

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