Dutch schemes get reprieve from cuts as minister lowers funding floor

first_imgHe added that pension funds using the extension must explain why this would be a balanced approach for all their participants and pensioners.The minister suggested that stable pension contributions and ditto annual accrual would contribute to this aim.He explained his decision to avert looming cuts by citing the risk of social unrest and the risk of people losing confidence in the future of the Dutch pension system.“Calm and stability are required to properly flesh out the pensions agreement,” argued Koolmees.In the direct wake of the accord, he had already decided to temporarily lower the minimum required funding from 104.3% to 100% to avert cuts.However, pension funds’ financial situation had further deteriorated since then as a consequence of declining interest rates.Current funding is approximately 100% on average – down from 109% at 2017-end – and is predominantly affected by falling interest rates.However, the effect of the financial crisis, increasing life expectancy and an insufficient contribution level also played a role.What’s more, pension funds must use lower assumptions for future returns when calculating their recovery potential as of 2020.In the envisaged new pension contract, pension funds don’t have to keep large financial buffers, which must enable them to quickly raise or reduce pensions, the minister explained. Dutch social affairs’ minister Wouter Koolmees has granted most ailing pension funds a one-year reprieve from implementing cuts of pension rights and benefits.In a letter to parliament, he said that he would temporarily reduce the minimum required funding to 90%, pending the elaboration of the pensions agreement concluded between the social partners and the government in June.However, seriously underfunded schemes would still have to reduce pension rights, and must implement unconditional cuts in order to improve their coverage ratio to 90%.Pension funds would subsequently be allowed to further improve their financial position to the minimum required funding in a 12-year period, rather than the current legal period of 10 years, Koolmees said. Cuts, however, would be required if schemes’ coverage ratio were to drop below 90% in order to keep participating in a pension fund attractive to young workers, he added.Currently, a steering group of the social partners and the cabinet is elaborating the pensions agreement.The minister said he expects results to be published next summer, when drafting the necessary legislation would start.He reiterated that raising the discount rate for liablities to avert rights cuts would not solve schemes’ funding problems.It would cause a redistribution of pension assets that would ultimately come at the expense of younger generations, he contended.“If we abolished the principle of an objective market valuation, the discount rate would become a ‘continuing plaything’ of contrasting interests between the generations.“It could also put pressure on the current mandatory participation in a pension fund, as players could wish to no longer participate.”In his opinion, changing the rules wouldn’t solve, and merely camouflage, pension funds’ financial problems, and could lead to a further erosion of schemes’ financial positions.Koolmees emphasised that a collective approach, solidarity and mandatory participation would also be key in the new pensions system.The large metal sector schemes PMT and PME were facing rights cuts next year as they had been continuously underfunded for a five-year period.At October-end, their coverage ratio stood at 95.8% and 95.1%, respectively.ABP and PFZW – the pension funds for the civil service and the healthcare sector – would have to implement discounts in 2021 if their coverage ratio was short of the required minimum at the end of next year.Their funding rayios stood at 93.2% and 94.1%, respectively, at the end of October.last_img read more

Speaking of Generations…

first_imgby, Jeanette Leardi, ChangingAging ContributorTweet32Share126Share36Email194 SharesWhen is it accurate, and therefore acceptable, to generalize about generations? Are stereotypes about Greatest/Traditionalist Generations, Baby Boomers, Gen Xers, and Millennials valid, or do they instead promote misunderstanding, polarization, and ageism?  I’ve been wrestling with these two questions for quite a while, but more particularly since I returned from a conference at which I gave a presentation called “In Other Words: Transforming the Language of Ageism.” It was a wonderful time full of great energy. While my talk focused on rethinking how aging is perceived and how older adults are negatively impacted by ageist language found in the media, the workplace, and in institutional models of care, the participants and I also discussed how ageism can be aimed in the opposite direction, with Millennials most often targeted. When the session was over, a number of participants thanked me for tackling the important subject of ageism toward elders. But what surprised and touched me were the number of Millennials who also came up to me to thank me for speaking to their experiences. It’s clear that ageism is everywhere and hurting everyone and that we need to do all that we can to eliminate it. Involved in this commitment to disrupt aging and ageism is the need to ask an important question: Is there a way in which the differences in our ages really do matter? If so, how?I think I’ve come up with an answer. Yes, generations are different, not because their members differ from one another as biological human beings, but rather, because of the events and external pressures each group experienced in their formative childhood and teen years and the ways in which most of them adapted to such influences. Let me explain.My father was a member of the Greatest Generation and my mother, the Traditionalist (Silent) Generation. The most influential events of their formative years were the Great Depression and the two World Wars. As a result, they and their society adapted by embodying frugality, intense patriotism, responsibility to community, commitment to marriage and family, strong religious faith and work ethic, and optimism about the future. I’m a Baby Boomer. My generation grew up in an affluent America of the 1950s through ’70s. We were the first children to be the recipients of direct marketing (Saturday morning TV cartoons, superhero toys, etc.) and to be the center of social attention. Our general response was to see an unbridled future of possibilities (space travel, the Peace Corps) and ourselves as the movers, shakers, and reformers of social values at every stage in our lifespan: during the Vietnam War, the rise of national feminism, the sexual revolution, environmentalism, and the expansion of the Civil Rights movement. We continue to carry with us our impulses toward equality and personal growth as we redefine aging as an asset rather than as a process of total decline.The Gen Xers? They grew up during Watergate, the energy crisis, the end of the Cold War, increased incidence of divorce, economic downsizing and layoffs. As the first “latchkey” generation of single or two working parents, they learned early on how to take care of themselves and to distrust the effectiveness of social structures to provide for them. Their generational behaviors reflect independence, entrepreneurism, pragmatism, and skepticism. And those “pesky” Millennials are the social media digital natives who have learned to negotiate their way through a nanosecond world of global communications, terrorist attacks, overscheduled lives, and helicopter parents. Growing up in the wake of the 9/11 attacks, they are self-confidently striving to rebalance society in more spiritual, tolerant, humane, and interdependent ways.    Now, of course, when speaking about members of any generation, it shouldn’t be said that all people in that cohort respond in all –– or any –– such characteristic ways. But an overwhelming pattern can be detected when examining their lives as a group. However, there are two important caveats: Populating every generation is a significant number of people who live in poverty and/or are subjected to racial, ethnic, sexual, or other discrimination that marginalizes them and reduces their chances of fully integrating into society as members of their generation. We must never forget this. In addition, there are members of every generation who, independent of poverty or discrimination, are outliers in their responses to the events and external influences in their lives.    That being said, do the above characterizations sound accurate? If so, and if it is reasonable to discuss generational differences in this way, how can we keep ourselves from falling into the trap of ageism?I think the answer is to understand that generational traits can always be tempered by intergenerational experiences in which all of us can learn new ways to think and act in the world. For example, if I as a Boomer can seek out opportunities to be with Greatest/Traditionalist people, Gen Xers, and Millennials, I might be able to learn effective ways to become (respectively) a more responsible, pragmatic, and interdependent human being –– and maybe share ideas on how to keep fighting for equality while growing personally.Generational traits are just that –– traits. They aren’t unalterable fingerprints nor are they placards to hold up with arrogant pride in protest of the viability and dignity of other generations. When we speak of generations, let’s do so without resorting to ageist attitudes or demeaning jokes. And let’s call out others who do. If we fail to appreciate the ways in which every generation is different, we deny ourselves some valuable resources for expanding our understanding of what it means to be a human being –– of any age. Related PostsAgeism and Millennials Part IHas there always been this level of contention between generations? Tell us what you think.Ageism And Millennials Part IILeapfrogging off my thought earlier this week about younger generations becoming resentful of older generations. The New York Time has an interesting piece about how people really aren’t very good at predicting how much (if at all) they will change as they age. When we remember our past selves, they seem quite different. We…Look Out Boomers, Here Come the MillennialsEvery one is aging. As each generation ages and reaches adulthood, they rule as if they were supreme, and for the most part they are. Each generation will rise, rule, and as life goes, fade into the pages of history.  Now we are witnessing the beginning of one of these…Tweet32Share126Share36Email194 SharesTags: Ageism baby boomers generations millennialslast_img read more