AMSTERDAM (Reuters) – Millions of Dutch pensioners will avoid cuts to their retirement income next year after the government decided to grant pension funds a year’s grace period to restore sagging coverage ratios, though it said future cuts and higher premiums remain likely.
The retreat by Mark Rutte’s centrist government had been widely expected, given pensioners’ anger and the approach of national elections in 2021. But the decision not to enforce the rules could hurt the reputation of the Netherlands’ pension system, often rated ‘best in the world’ and framed as an example for other countries.
In a letter to parliament, Social Affairs Minister Wouter Koolmees said he would grant a one-year grace period to funds that maintain a coverage ratio of better than 90%. Previously, funds with a coverage ratio of less than 94-95%, including the large ABP and PZFW funds, had been on track to cut payouts.
(Reporting by Toby Sterling; Editing by Catherine Evans)