Future of Pensions Act to House of Representatives
Minister Schouten presented the draft Future of Pensions Act to the House of Representatives. After years of discussing the reform of our pension system, the government has now gained momentum. Which is good news, because it allows pension funds to continue their preparations for a new pension scheme. We hope the bill will be processed quickly, so that we can switch to the new pension system as soon as possible. The new system is fairer and more transparent, so we hope it is introduced sooner rather than later. Under the new system, it will also be easier for pensions to follow developments in financial markets. In financially good times, pensions can be increased sooner, and they can be decreased when things are not going so well. It also increases the chance of a better pension. So the sooner the better, as far as we're concerned.
New rules to increase pensions faster
It seems that new rules will also be introduced this year that ensure that pension funds need to maintain fewer reserves. This means pensions can be increased earlier than is currently the case, namely at an average funding ratio of 105% over the past twelve months. At this moment, this still is 110%. If there are no major shocks in the financial markets, we may reach this 105% this year. In that case, the pension board will have to decide if we can increase pensions and if so, by how much.
Of course, we want to increase pensions as soon as we can. An increase in pensions is important, especially now that everything has become more expensive, from petrol to energy and groceries. But the pension board must also ensure that pensions can be increased responsibly, considering the interests of all participants, young and old alike. And when taking a decision, we also look ahead to the new system.