The issue of raising retirement age in the Netherlands has proved a divisive issue after both the unions and the employers’ association presented different set of plans on Tuesday evening. The two sides have until the end of the day to come up with a compromise.

Employers and unions have been engaged in a discussion over the measure since March, when the Dutch government declared that nationwide retirement at 65 would become unaffordable, given that the working population which finances the pension funds is shrinking.

Prime Minister Jan Peter Balkenende's cabinet wants to gradually introduce 67 as the standard retirement age, but had given the Social Economic Council, which is made up of employers’ and unions representatives, until 1 October to come up with an alternative for the unpopular policy.

Chat shows
Unable to agree, the employers’ associations VNO-NCW and MKB-Netherlands as well as the FNV and CNV unions scrambled to appear on various television current affairs programmes and chat shows on Tuesday evening to explain their positions after presenting their plans to the press.

The employers’ associations propose raising retirement age from 65 to 67 in one go in fifteen years’ time. This means everyone who is currently over 50 will be able to retire at 65 as they had been expecting.

Later the main union federations FNV and CNV put forward their alternative plan. They want to introduce a flexible system in which employees can choose whether they want to continue working until the age of 67. There would of course be a financial incentive to continue for the extra two years.

In current affairs programme NOVA, Bernard Wientjes appealed to the unions “to accept that the retirement age has to be raised”. He dismissed the union proposals because they would not save any money. In a separate studio, Agnes Jongerius, chairperson of the FNV union appeared in talk show Pauw and Witteman to explain the unions’ flexible alternative.

Tradition
It is unusual for the employers’ associations and the unions to become so divided over an issue. The Netherlands has a tradition of negotiating labour agreements. The unions accuse the employers of flatly rejecting their alternative proposals. But employers say that upping the departure age to 67 is "unavoidable".

The acceptance of the idea of raising retirement age, albeit voluntarily, is quite a turn around for the unions. Up until recently, they had refused to even contemplate the suggestion.

Now that two plans have been presented and both sides have sought publicity for their positions, it seems unlikely that the Social Economic Council will manage to come up with a joint recommendation at the last minute. If it fails to reach agreement, the government can go ahead with its plan to gradually raise the retirement age to 67, thus saving four billion euros per year.

Opposition
Meanwhile the opposition parties which had supported the unions’ position up until now are also divided over the plans. The Socialist Party continues to back the unions as long as “retirement age remains 65 and people retain a full pension”. Freedom Party leader Geert Wilders however said “The unions have sold their soul to the devil”.

Democrat D66 leader Alexander Pechtold who supports raising retirement age called the union plan “vague and complicated”.

Labour Party leader and Finance Minister, Wouter Bos, remains optimistic that the two sides will find common ground before the day is out. He told NOVA “I speak to people now and then.”

It could be a long day. But there is hope CNV union chairman Bert van Boggelen says “We are prepared to negotiate until the last minute…if need be we will stop the clock.”