THE HAGUE, 25/03/06 - The Dutch cabinet is very sceptical about the way in which the European Commission wants to ensure that employees can take their pension rights with them over the borders within the EU, Social Affairs Minister Aart Jan de Geus said in a letter to parliament.

The consequences of an indexation obligation, or inflation correction, will be particularly enormous for the Dutch pension system, according to De Geus. A spokesman for the minister stresses that the EU plan requires unanimity and the Netherlands can as a last resort use its veto. "But we are assuming that it will still be adapted, because we have strong arguments for this."

The proposed European Commission directive only relates to supplementary pensions. For state pensions, such as the AOW in the Netherlands, an EU regulation enabling portability of pension rights has already existed for many years.

The Netherlands endorses the goal that employees emigrating to a different EU country to work there can take their pension rights with them without any problems. But the cabinet is disappointed that the proposed directive takes little account of the different systems applied in the 25 member states.

De Geus points out that employees in the Netherlands, along with Denmark and Sweden, have built up the highest supplementary pensions. This means the consequences for these countries are also the greatest. This contrasts with countries such as France, Italy and the Central and East European countries that joined the EU in 2004, where employees have built up relatively little supplementary pensions.