Members of one of the Netherlands' largest unions, FNV Bondgenoten, have voted against the new Dutch Pensions agreement in a referendum set up to decide the union's position

It was announced today that one in five members of the 475.000 strong union cast their vote, and of these, 96% said they were against the agreement as it currently stands.

The plans were drawn up by the Dutch Government and its social partners in June but have since then come under fierce criticism from the opposition parties and various unions.

The core of the agreement will see the pensions age go up one year to 66 in 2020 and will see a rise in relation to life expectancy after this. The proposed changes also include less guarantees regarding the final levels of pension payouts, which will be more dependent on the investment returns of the funds.

Henk van der Kolk, chairman at FNV Bondgenoten, said he was glad with the very clear outcome. The union earlier advised its members to vote against the plans.

"There can be no doubts regarding the outcome of this referendum: the members of the Netherlands' biggest union do not want this pensions deal in which we will work on the basis of expected instead of real returns. There is no need for reserves anymore and all (the) risks are (placed on) the employees."

Van der Kolk said these were "really bad starting points".

"You can count yourself rich quite easily if you start working with expectations about returns. Definitely now, with all the volatility on the market this is too dangerous. We want clear sets of rules for every fund so that people who are offered security will really receive this as well. And if it does go bad then we would like to see the employers to be equally as responsible and not just see all the risks being shoved onto the employees."

The proposed new Pensions Act, so claim its supporters in return, aims to ensure that pension schemes would be in a better position to deal with a volatile market and an increasingly ageing population. According to the signatories it would ensure ongoing pension provision for young and old and would increase the sustainability of the government's finances by reducing public spending by 0.7% GDP.

However, FNV Bondgenoten is not alone in saying that the proposed reforms create a potentially 'unfair' divide between young and old members. The Centraal Plan Bureau (CPB), the Netherlands' central research agency, earlier released a report into the possible consequences of the proposed changes. It said that the agreements regarding schemes' reserves and investment policies were 'worrying', which led eventually to even fiercer opposition.

All partners took months to find a model that would require schemes to hold smaller reserves and initially all seemed to support the plans aside from FNV Bondgenoten, which is now officially against them.

The outcome of the referendum will no doubt create a new spark in the debate and leave the opposing parties even more divided. There is one more referendum which is to be held by FNV Abvakabo - another big union which is also part of FNV (the federation of Dutch unions) - in September. Steps to broker a new agreement may have to be taken after that.

First published 15.08.2011

azeevalkink@wilmington.co.uk