The Dutch parliament narrowly voted on Tuesday to reject a proposal by member of Parliament (MP) Agnes Joseph, a former actuary, to give pension fund members the opportunity to block the conversion of their defined benefit (DB) accruals to defined contribution (DC) capitals. A roll call vote was required after a first vote ended in a 75-75 draw.
The outcome of the vote was uncertain until the last minute, as it was such a close-fought battle. Eventually, the last-minute decision by the small opposition party DENK, a left-wing party representing Muslim immigrants that has three seats in the Chamber, to vote against the amendment proved decisive.
The negative advice by pension regulator DNB on the amendment and the expected additional administration costs that would be the consequence of organising ballots on DC conversion or giving members the right to opt out from DC conversion tipped the balance for DENK, the party said in a written statement issued just an hour before the vote.
The original proposal by Joseph introduced mandatory ballots on the pension fund level about the conversion of DB accruals to DC. For these votes to be valid, a minimum of 30% of members would have to cast a vote. If this threshold would not be met, pension funds would be barred from converting accruals to DC.
After her amendment was slammed by the Council of State, the highest advisory body to the Dutch government, as well as regulators AFM and DNB, Joseph adjusted her amendment several times.
The final text proposed giving every member a so-called individual right of objection, giving savers the opportunity to keep their pension in a DB arrangement.
Strong resistance
Despite the changes, Joseph failed to convince enough fellow MPs to accomplish the mission that had motivated her to enter politics for the new party New Social Contract (NSC) in 2023 in the first place.
Joseph’s attempts to give members more influence on the conversion of their pensions from DB to DC had met strong resistance from the pension sector.
In a press statement sent immediately after the vote, the Pensioenfederatie said it was “delighted” the amendment had been rejected by parliament.
“This is exceptionally good news for the Netherlands,” said the federation’s president Ger Jaarsma. “In the new pension system, pensions can be increased faster if the economy is doing well. At the same time, we keep important characteristics of the current system, such as solidarity and collectivity. This amendment would have ended this.”
Harmen van Wijnen, chair of the Netherland’s largest pension fund ABP, said in a post on Linkedin he was “honestly happy and relieved” Joseph’s plans were rejected.
“It’s not for no reason that so many organisations and experts – from employers and employee organisations to regulators and pension funds – have come out against the amendment. I hope everyone realises the discussion has now been closed,” he added.
Instead of proposing a separate law, Joseph had opted to table an amendment to an already-existing draft law arranging an extension to the pension transition by a year to 1 January 2028.
While Joseph’s amendment was rejected, the law itself was approved by parliament. Joseph’s NSC voted against it, together with its coalition partners, the farmers’ party BBB and far-right PVV, but all other parties backed the postponement. The law will now be sent to the Senate, where it is all but certain to be approved.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication.
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