NETHERLANDS - The EUR16bn Bedrijfstakpensioenfonds Metalektro (PME), the Dutch pension fund for the metal industry, has decided no longer to allow its members to opt for early retirement at the age of 58 or 59, with immediate effect.
PME members will now be able to apply for early retirement only from age 60 onwards.
A fund spokesman said: “The government plans for pre-pension made a lot of people very anxious and we had a large number of our employees retiring at the age of 58; much more than we expected, resulting in a depletion of our reserves. So, yesterday our board decided to stop the possibility of our members retiring at 58 or 59 years. The earliest that they can retire is now at the age of 60.”
In a statement, the pension fund said that pre-pensions are financed through a special reserve into which everyone in the industry makes a contribution - around 7% of wages.
The exhaustion of the reserves through an increase in the number of people opting for early retirement would result in the rise in the premiums and in the long run affect pensions indexation, the statement added.
The only other pension fund to prevent its members from retiring earlier than 60 years is the Dutch pension fund for metalworking and mechanical engineering PMT, which last year announced that members will not be able to retire at age 58 or 59.
A PMT spokeswoman said that the pension fund had put an end to retiring before 60 years because it had “anticipated the problem that PME is now facing”.
The new Dutch pre-pensions law, which was recently approved by parliament, aims to remove the fiscal incentives of early retirement (before 65) from 1 January, 2005. While early retirement will still remain possible, the extent to which this can be financed and structured by existing employer sponsored plans has changed.
The PLSA's Richard Butcher says we should all work harder to reconnect with the saver, be open with them and tell them the truth
Trustees lack expertise, time and resources to develop effective communications on technical pensions issues and need professional help, a major review of the British Steel saga has concluded.
In this week's Pensions Buzz, we want to know if you think trustees should consult directly with members before agreeing to a DB superfund buyout.
Thousands of savers taking tax-free lump sums ahead of retirement are at risk of a pensions shortfall in later life due to neglecting their remaining pot, Zurich has warned.