15 September 2022

Black Swans: Pension sector, say you’re sorry

The TV documentary series “Zwarte Zwanen (Black Swans)” broadcast two episodes about the world of pensions this summer.

It has become a much talked about documentary series.

Nothing left in the money pot

Although some will probably deny it, there is a lot wrong with the pension sector.

The most important issue is that support for the sector is under pressure from all sides. As we move to a new pension system, instead of denying or trivialising these problems we should be addressing these problems seriously and not proclaiming: “we are all making progress”, as Tuur Elzinga of the Dutch Trade Union Confederation (Federatie Nederlandse Vakbeweging, FNV) did. The trade unions and FNV in particular are one of the main architects of the new pension system. Such statements are counter-productive and simply misleading.

Young people – both those who are well-educated and those who are not – believe that there is nothing left in the money pot for them. My younger colleagues also say this. You should try talking to your baker about pensions when you buy your next loaf of bread. It is very likely that the baker has no idea how his pension is arranged.

Major Mistakes

This loss of support is a serious problem to which legislators pay too little attention.

Older people, in turn, say: I was promised a pension for 30 years, and now it turns out that those promises cannot be kept. In terms of purchasing power, participants have already lost some 25%. After all, our pension is nominal, not real.

The problems will remain, even with the new pension system. I do not expect confidence in pension funds to increase as a result of this new system. One way to regain this confidence is, first of all, to admit that major mistakes were made by the pension funds and the social partners, including mistakes in communication. That would be a good start. Simply to say: ‘guys, we’ve made a mess of things, but we’re going to do it differently now.’ I think that a statement like this will already be met with a great deal of understanding.

I recommend watching the Zwarte Zwanen episodes again, if only to get an idea of the huge gap that has opened up between the participants and the pension funds.

Love it or hate it

Pensioenpro, the trade journal for pension professionals, rightly commented on a Zwarte Zwanen episode:

“The episode raises important questions for the pension sector. How much tolerance should funds show to individual participants, even if the funds are legally correct? Has the system become too complicated? And how can funds, administrators and social partners jointly prevent the implementation from becoming completely bogged down? Is €7 bn a year for a funded pillar a justifiable expense? And perhaps most importantly: how can the lack of indexation and the interest rate problem finally be tackled?”

And this says it all. The new system is possibly even more complicated than the previous one. Shouldn’t this be addressed? After all, wasn’t this the purpose of a new pension law?

‘Love it or hate it’, Zwarte Zwanen exposed many shortcomings that the general public are unaware of. For this reason alone, the fact that attention is being paid to this should be welcomed. Although it does not help to restore confidence in the sector. The time is almost up: it is 5 minutes to 12. Is it time to say sorry?

More information

GMW pension attorney mr. K. Vermeulen and prof. dr. H. van Meerten conduct various proceedings against the state and pension funds. Are you professionally interested in GMW’s pension solutions? Then please do not hesitate to contact us.

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