Guaranteed Pension Storm

President Klaas Knot of the Nederlandsche Bank made in his own words a not-so joyful announcement early January. A true pension storm is brewing; according to Knot 125 pension funds have to cut back. Meanwhile, the prospect is slightly more promising. That is, not for the 4,7 million participants of three of the five largest pension funds. If market conditions will not improve, they will in any case have to cut back on benefits starting in April 2013.

I always thought of pension as a very positive word. “Lovely, a little while and I’ll be getting my benefits”, people of age used to tell me with a blissful face. They go and tend the garden, travel around and play with the grandchildren. The French translation of the word pension is also very positive: retraite. Google retraite for a moment and you are offered the most wonderful travels to find yourself and inner peace. Ouch, with this pension storm travels in any kind of form or shape won’t happen, I’m afraid.

Not just the pensioners, but also employees will be affected. In a country like the Netherlands we were all reasonably certain of our future. Saving a little for later, so that we were guaranteed of a nice comfortable retirement. Scratch that guarantee, because the care for these elderly is an additional problem of this pension storm. Although I do not worry a lot about the elderly of today that much. No, I worry mostly about the generation of my children: the young people of today. I am not the only one there, because our minister Henk Kamp of Social Affairs also fears for our future. “If nothing is done right now with the pension funds then the younger people will be hit disproportionately harsh.”

This applies not just for this pension storm, thinks CNV Youth chairman IJmert van Muilwijk. “The bill for setbacks has been passed along to the next generation for too long now”, he thinks. In addition to this bill the retirement age is being passed on as well. This younger generation will definitely have to work longer than is currently the case. But well, perhaps it will be the 70th year of life by then. It seems we keep on getting on older, so why not. But what about the care for the youth of today? A lot is changing because of this pension storm, as well as because of other causes. The personal contribution for the health care is rising significantly and will only keep on rising according to many. That is why it is already being said that young people should start saving money to be able to buy a wheelchair later on. Menzis and Aegon are already reacting; a health care savings account. According to these initiators the base and additional insurances will become increasingly smaller. According to the chairman of Menzis this new savings account has a guaranteed interest. Guaranteed? In November last year minister Kamp said that a guaranteed pension would remain a basic principle. The word ‘guaranteed’ is put on my list of words that have multiple meanings to me.

Heavy cutbacks on my pension, I need to work on for a longer period of time and I might as well start saving for my wheelchair now. Oh right, the European debt crisis is still there too. What a wonderful prospect I’ve got. Perhaps I can be guaranteed of a significant discount on a retreat somewhere…

What do you think? Does this pension storm truly affect you that much?