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Netherlands Should Eliminate Access to Early Retirement To Retake Top Spot in Mercer Index

15 October 2012 (PLANSPONSOREurope.com) – The Netherlands needs to introduce a legal minimum retirement age in order to retake its number one ranking in the Mercer Global Pension Index, the actuary has claimed.

According to the index Netherlands’ retirement system made some gains since 2011, with its value increasing from 77.9 in 2011 to 78.9 in 2012, but its overall global ranking has fallen from first to second place behind Denmark. 

The Dutch currently have no minimum age for retirement, although retiring before 67 means a smaller pension fund pay-out.

And official data from Statistic Netherlands shows the Netherlands has taken great strides in this area as the average retirement age for Dutch workers last year was 63.1, up more than 13 years on data for 2006.
But data from the Dutch pension regulator also shows the average funding ratio of Dutch pension funds was 97% in August.

Dutch principal pension consultant Tim Burggraaf at Mercer told PLANSPONSOR Europe eliminating access to early retirement could help boost solvency and coverage ratios among Dutch pension funds.
“We don’t have a minimum retirement age.  If we have a regular age which is now 67 and you want to retire early it is fine – you just get less pension,” he said.

“Theoretically one could retire at 26 and have a ludicrously low pension.”

According to Burggraaf it makes sense to introduce a minimum retirement age to create a more “solid” pension system.

“It can make sense to say you cannot retire age before age x. So for example you cannot retire before 65 that all makes sense.”

The Global Pension Index placed Denmark in first place and Netherlands dropping to second.
Sweden (4th), Switzerland (5th), the UK (7th) and Poland (10th) all featured in the top 10 countries as measured by the index.

PLANSPONSOREurope Staff
editors@plansponsoreurope.com





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