The ECB has used an ultra-loose monetary policy to pump money into the Dutch economy and encourage lending. However, the policy has increased the funding requirements of Dutch pension funds. The big central banks have engaged in buying assets since the 2008 financial crisis.
The ECB cut interest rates to a record low and restarted quantitive easing in a bid to revive the eurozone economy.
Millions of pensioners in the Netherlands are facing a reduction in their retirement income for the first time next year.
The Dutch government is now expected to come up with measures to avoid cuts to people’s retirement income.
This comes amid a looming huge pensions crisis worldwide and economies are struggling to ensure financial support for their ageing populations.
They could do this by releasing the tight funding rules.
Dutch minister for social affairs and employment Wouter Coolness is expected to write to lawmakers to outline his response to the issue.
A club of current and former policymakers, Group of Thirty, has warned of a £15.8 trillion shortfall in funding to suupport ageing populations.
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Chair of the Dutch pension federation, Shaktie Rambaran Mishri, said contributions may have to rise by up to 30 percent over the next few years.
She warned: “As things stand, around 2m people are facing cuts from next year.”
The Netherlands have one of the best pensions in the world so problems in the country indicate a global pensions funding shortfall.
The Dutch pension system combines a pay as you go system.
Bloomberg gas reported there is a £16 trillion pensions crisis in the world.
Solutions to the shortfall include increasing the retirement age, increasing taxes and accepting retirement incomes to be lowered.
Since life expectancy has lengthened, there is a lot more strain on existing taxpayers to support a bigger number of retired people.
Research by Which? has found that on average retired couples need around 18,000 a year to cover food, utilities, transport and housing costs.
This rises to £26,000 for people who want a more luxurious retirement with holidays.