No more vacation for Balkenende

Being a member of our "Tweede Kamer" certainly does pay off well, both literally and figuratively.
The pay is nice, the holidays are fixed and ample and when you do not feel like doing something useful, hide in the back. Resigning from the Tweede Kamer also has it’s advantages: the pay between jobs also is substantiable.
However, I’m not going to rant on our Tweede Kamer. The members do an important job, and have to carry a heavy burden. Representing us is hard work.

An issue almost certain to keep the "Tweede Kamer" busy is the imminent retirement of the guest workers who came to Holland in the sixties and seventies. Because they played an important part in our history, a reward should be prepared for them. Or so does the PvdA think. The real problem is taht, due to the fact the guest workers did not live in our country their entire life, their AOW is cut by a certain precentage. This percentage can be calculated by subtracting the number of years they worked in The Netherlands and 18 from the age.
A person who is 65 years in age, came to Holland when he was 25 and has lived here ever since does not benefit the full 100% of the AOW, but does so for 100% – ( ( 65 – 18 – 40 ) * 2 ) = 86%. Put simply: for every year a person did not live in The Netherlands, he or she is cut 2% on AOW. If you don’t pay for it, you do not benefit from it is the simple and effective reasoning behind it.

Among others, the PvdA does not share this line of thought and is lobbying for the approval of the full benefit for the guest workers.
I’m trying to see the reasoning behind this, as I do not fully understand it.
The main reason for the PvdA is that they find it unfair since these guest workers have played such an important role in our recent history and should be rewarded accordingly.
I underscribe the importance of the guest workers, but I’m letting the financial aspect of the AOW prevail above subjective matter of rewards: if the premium is not paid for a whole year, the benefit should not be reaped.
The proposed 100% quite possibly puts an excessively large burden on the system and could very well lead to the demise of the AOW as the system simply cannot cope with such an added load.

As the left and right fractions in our political landscape do not agree on this matter (left is in favor of awarding 100%, right is not) I can see a crisis coming for the upcoming year. The issue is more current due to the retirement of a large part of the group guest workers over the next few years. Next year will prove to be harsh on our leaders: I’m not setting any money on Balkenende IV reaching 2009 intact…

2 thoughts on “No more vacation for Balkenende”

  1. Agree. Shouldn’t be getting 100% there.

    It’s been long discussed that there’s two general systems of building up pension. In the first, the ‘omslagstelsel’, which we use for the AOW, current workers collectively save up a sum that is given to retireds asap. The second system, the ‘kapitaaldekkingsstelsel’, people save up money (forcibly by way of the government) that they get once they retire.

    AOW is based solely on the omslagstelsel-system. This leaves it vulnerable to changes in demografics. It should be more of a mixed system, with my preference being on a bulk in the kapitaaldekkingsstelsel as that gives more options of risk coverage and risk spreading.

    Of course, a switch in such a system is a tedious and drawn out process as you can only start a system based on the ‘kapitaaldekkingsstelsel’ from the start of an employee’s career. Which means it’s not really politically attractive…

    Back to the matter at hand: we’re in a financially solid period, so everyone’s handing out money as if there’s no tomorrow – now’s the time to rake in the votes! I’m a keynesian economist at heart so I disagree with that attitude in general. The reasoning is also flawed. Guest workers are basically being rewarded more for their work than non-guest workers, as they get an equal amount of work for a lesser period of time. There’s a reason the current system is in place, and it’s not to rake in popular votes with easy short-term measures.

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