I, for one, keep my annual statements unopened in a box under the bed. Unless I run into a loaded heir or banker, I do not think of my pension fund. Ever. 'Live now, care later' is a saying in The Netherlands.
And then last week, Agnes Jongerius, forewoman of the Dutch workers union, marched into my living room.
O, the news, our 'iron lady' crashed the recently-agreed pension deal between government, employers and workers. Pension funds took severe blows on the stock market and sighed under the burden of one too many oldies living past their expiration date. It’s the youngsters who are going to pay the bill, she said. No more retirement at the age of 65, keep up the pace until the age of 67. Pension funds will have more freedom to invest as they please, yet investment risks will be for the account of the workers.
I paused on this for a second. I had always thought that pension distributions were a guaranteed amount. Like my salary, expense account, Blackberry and company car: provided for and guaranteed by the firm. I checked under the bed. Yes. The shoebox was still there. Why bother to open it? Surely, those lucky enough to slave for a powerhouse firm, like me, would not be affected by all of this.
However, Pension Patricia candidly displayed her unsolicited expertise over lunch the following day .
"Of course we have a company scheme, but worst case scenario you could be left with the baseline government pension of not even €1000 a month,” she began.
My peers exchanged uncomfortable looks. I pictured myself snooping around the shacks as a modern day Olive Twist.
"It's your own fault, really. Twenty-somethings switch employers more easily than haircuts these days. They don’t even bother to check if they can transfer any provisions, and to top it all off, they start buying houses with a mortgage exceeding six times the value of their annual income. Without any down payment or redemption obligation!”
I flushed. Half my salary is consumed by my mortgage, which is indeed redemption free. I served four employers in five years. Not once did I bother to transfer any provisions to the next fund. I am completely clueless with regard to my income after the age of 65.
Patricia was on a role and rambled on. "It’s a bigger problem, you know. You youngsters do not now how to save anymore. How to do more things with less means. Laundry? Oh well, just stuff it all in the drier. Nobody uses a clothes line any more!”
I looked down. I don’t even have a clothesline, let alone a garden or balcony. "Off course, this is not that much of a problem if you continue your career within the firm,” Patricia concluded. "Just make sure to start saving up today."
I nodded. No more will I make the mistake of mingling with the employment department for lunch.