Saturday, 07 January 2021 10:24 PM

Pension funds cut pensions

The consequences of the euro crisis will hit pensioners first, because pension funds are not in good shape. The Dutch Central Bank requires more than 125 pension funds to put their financial affairs in order. Most likely, they will do that by lowering retirement benefits. The result is that the pension funds will have to cut the pensions of about eight million Dutch people.

There are two other alternatives for supplementing the pensions, namely by having employees and employers pay an extra premium into the pension fund or by not allowing the benefits to pensioners to automatically increase with wages. Still, there are fears for the third option: by outright cutting pension benefits. The other two options have already been used.

What you can do as an employee is or hope that the financial situation of the pension fund will improve in a few years, so that you will still receive the traditional commitment of 70 percent of your salary as a pension. Or you must accept the discount and make sure that you yourself put aside an extra cent through other alternatives. So if pension funds start cutting benefits, employees must be just as careful as the elderly.


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