Minister unmoved by attack on pre-pension plans

18 August 2004

AMSTERDAM — Social affairs minister Art Jan de Geus indicated Wednesday he was not surprised by the Council of State’s criticism of his plans to make early retirement financially unattractive.

The Council of State is the government’s highest advisory organ. Sources revealed to the media that its latest report describes the government’s plans for the VUT and other pre-pension schemes as too radical and a form of double taxation. Enticing people to continue working can be achieved in other ways, the report said.

The government has received the report and will discuss it next week.

In May, wage moderation talks between the government, unions and employers broke down when the Cabinet insisted on its plan to tax the premium paid into early retirement schemes and payments a worker receives on early retirement.

Responding to the leak about the still-confidential report, a spokesperson for De Geus said the Council of State had been a long-time opponent of the principle of double taxation.

The minister feels that it is more important, the spokesperson said, to make adequate arrangements for people in the transitional phase rather than concentrating on strict interpretations of taxation philosophy.

The FNV trade union has backed the Council of State’s findings. “The Dutch people are opposed [to the government’s plans], the unions are opposed, and now the Council of State is too. This makes the support for the measure very thin indeed,” said deputy FNV chairwoman Agnes Jongerius said.

Subject: Dutch news