NETHERLANDS - State subsidies for early retirement schemes are no longer available to those aged under 55 on 1 January 2005, following a host of new reforms effective 1 January 2006.
A spokesman for the Ministry of Social Affairs (Ministerie van Sociale Zaken) said the measure, effective from 1 January 2006, was part of a campaign to encourage people to work longer.
The Life Course (levensloop) Plan, which uses tax incentives to encourage people to save towards taking career breaks, was also effective from 1 January.
Under the plan, a worker can save up to 12% of their gross annual wage to a maximum of more than two yearly salaries. Compensation days and holidays can also be partially “cashed in” and saved. When an eventual withdrawal is made, the worker is entitled to an additional e183 tax deduction for every year of participation in the plan.
In related news, a draft Pensions Bill submitted to the Second Chamber by Minister of Social Affairs and Employment Aart Jan de Geus, to be effective by 1 January 2007, would grant pensioners the legal right to clear information about their pensions.
A spokesman said the bill would also give a legal basis to the Financial Assessment Framework (FTK), set to come into force on 1 January 2007 as part of the new bill. Under FTK proposals, pension funds will need to be 105% funded 97.5% of the time.
“We want to give people more security and we want to give the regulator more measures to say to pension schemes what kind of coverage they need to have,” she said.
Shifting the focus of debate away from early retirement issues, pension funds and insurance companies would be obliged to inform participants of their acquired rights and the indexation of their pensions at least once a year.
Pension schemes will also be required to stop practices in which the admission age is set higher than 21, to prevent discrimination of younger workers. Under some pension schemes, employees do not start to acquire pension rights until they reach the age of 25, the ministry said.
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
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