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Advisory Council: Necessity of drastic measures AOV unclear PDF Afdrukken E-mail
Wednesday, 20 February 2013 10:39


WILLEMSTAD — According to the Advisory Council, the highest advisory organ of the government, the explanatory memorandum for the adjustments of the pension scheme (AVO) doesn’t offer much insight on the necessity of drastic measures and therefore is lacking on many points. There’d be more support for the draft if the government provides more clarity, according to the Advisory Council.On December 18th 2012 the government requested an emergency advice on amending the national regulation of the AOV and the Widows and Orphans Insurance (AWW). The amendments are to make and keep the AOV-fund solvent. For that reason the retirement age is increased from 60 to 65.


According to the Advisory Council, the government must consider the new measures thoroughly and be prepared for the side effects of these measures. What’s the government’s flanking policy to minimize or mitigate the amendments as much as possible. The Advisory Council advises the government to adjust the explanatory memorandum so that it has a more distinct and informative character for the wide public. This will increase the social support for the draft. For instance, the effect of increasing the AOV-age all at once from 60 to 65 is insufficiently substantiated as regards figures. The figures and graphic in the explanatory memorandum are insufficiently substantiated and explained and very difficult to read. Moreover, these calculations were made when one intended to introduce the new regulation on January 1st 2012.

“Nor does the explanatory memorandum offer the possibility of increasing the retirement age in phases and contrasting an increase all at once to support and perhaps make the need for such severe approach – as suggested in the draft – more acceptable. Furthermore the current position of the AOV-fund and the side effects of an increase all at once are relevant to prove if an increase in phases is effective or not, and if temporary measures can be taken for a gradual implementation of increasing the AOV-age, over several years”, the Advisory Council stated.



In the interest of reconstructing the AOV-fund, the Advisory Council suggests doing away with the Christmas bonus temporarily in a period that is to lead to a gradual increase of the AOV-age. The Advisory Council also advises the government to intensify the monitoring on payment of AOV-premium from insured persons and the bonus from employers both in the formal and informal circuit. Finally, the government advises to study the possibility of introducing additional tax facilities in the long term thus making it easier for citizens to provide for their pension. With that the citizens could arrange their future income.