KPMG Meijburg & Co, the Netherlands comments on Work Party - Flexible Pension Schemes (WPFPS)
This is contribution number 21 by KPMG Meijburg & Co regarding Work Party - Flexible Pension Schemes (WPFPS)
On September 1, 1995, WPFPS issued its report to Undersecretary Vermeend on the fiscal possibilities of introducing more flexible pension schemes. The report contains 29 recommendations which can be used in the future in ministerial regulations or resolutions. The Work Party recommends, among other things, the application of a maximum percentage of 2 per cent per annum of the last earned salary for the pension accrual. The percentage of 2 is considered adequate to accrue a socially acceptable pension. However, according to an August 1987 resolution directors-major shareholders were allowed an accrual percentage of 2.33 per year. The question therefore is whether an accrual percentage of 2.33 will still be permitted in the future. Moreover, a number of early-retirement-schemes are in force which apply a higher accrual percentage than 2. It is strange that an accrual percentage higher than 2 is labelled inappropriate in a report attempting to make pension schemes more flexible. As far as the directors-major shareholders are concerned, the Work Party recommends the updating of the August, 1987 resolution.
Furthermore, it is recommended that retirement should take place between the ages of 55 and 70. The exact date should be included in the pension scheme. The recommendation also aims to achieve that in a pension received will be limited to no more than 70 per cent of the last salary. If one decides to continue working after the regulatory pension age of 70, further pension accrual to a maximum of 100 per cent of the last salary should be possible.
This message is most likely to be relevant for employers having employees working in the Netherlands.
Further information can be obtained from mr Alfred GM Groenen, MCL, KPMG Meijburg & Co, Amsterdam (Netherlands); fax 31 (20) 656 1247
Keywords: Netherlands / Dutch / Europe / EC / EU / European Union / KPMG Meijburg & Co / inward investments / MNE / pension scheme
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