Tinkering with the AOW

The Dutch Pension System is a three-legged stool, made up of the tax-supported Old Age Pension (the AOW), the employer’s  pension plan, and private insurance savings.  This is somewhat parallel to the American system of Social Security, employer’s defined benefit plans, and personal IRA/Roth savings plans.   The AOW guarantees 70% of the minimum wage, currently paying around 1000 euro per month per person.

All workers vest 100% into the AOW program over 35 years, so each gains a 2% payout for each year worked.  Thus, an expat working in the Netherlands for five years would build up a stake of 5x2%=10% of the minimum wage, or around 100 euros per month.  Not huge, but an extra 1200 euros per year for life, indexed to the minimum wage, isn’t something to overlook.

These benefits may be limited based on the country of residence after retirement.  Those in the United States are currently eligible, but it’s best to check the Sociale Verzekeringsbank (SVB) website for details.

As with many western countries, the Dutch government is proposing to gradually raise the retirement age from 65 to 67.  This has prompted some interesting suggestions from the head of the Dutch FNV labor union, Peter Gortzak.  He argues that a more flexible AOW is needed, one that allows workers in physically demanding jobs to retire earlier, while those wishing to continue working past retirement age have encouragement to defer their pension (with the possibility of a higher monthly payout). He suggests introducing a fixed period of benefits, in which a minimum retirement age is calculated back 20 years from the mean life expectancy in that job.

It’s an interesting idea, recently repeated in the Economist, and a good example of the out-of-the-box thinking that I think the Dutch do so well on social issues.  It’s also good cappuccino-chatter for sitting out with friends on warm spring days.

I like the ideas of giving workers a flexible choice of when to stop, incentives to keep willing people engaged with work,  and protections to keep older workers out of physically demanding jobs.  Life expectancy is a good way of defining a flexible threshold: transparent, adaptable, and understandable.  It has the additional social benefit of highlighting the hazards of some jobs and motivating technical and workplace changes. 

I’m not as happy with the idea of a fixed 20 year payout term; I would feel like I would keep working out of fear of what might happen when I’m 90.  Instead, I’d rather see a fixed total sum payout with larger checks resulting from each year that I defer retirement, without limit.

As a sideline, the same Economist article notes the increasing concern that older retirees will simply outvote younger workers to increase their benefits in the future.  To counter that, Arji Lans Bovenberg (Tilburg University) suggests that parents be given an extra vote for each of their children?

  P.S:  A US friend, recently retired, tells me that there are offsets and taxes to prevent double dipping among national insurance pools, effectively keeping him from claiming the Dutch pension.  Again, check the rules.

It’s beginning to feel a lot like a Friday

Some days go better than others.

I thought that things were coming together pretty well.  Apartments located, car selected, lease arrangements in hand, headed out of the country to give a talk at a nice resort.

By afternoon, my present landlord relayed that we had a contract and I couldn’t move until June 1, the auto lease group emailed that they would like 20% down on a car because the business hadn’t been operating for long enough, and the volcanic ash  terminated my flight from Schiphol.  I was rebooked for Sunday afternoon, with an overnight layover in New York and a 6 am flight from Laguardia.

Still, lucky to be getting out at all.  Yes, both the lease and the country.

The scroll at the BBC has filled with bulleted text that resemble war dispatches.

1745 Mick in Folkestone says: I just went out in the garden and you can smell sulphur in the air

1641 Nats to make further announcement at 2030BST about plans for UK airspace on Saturday.

1500 Hungary is planning to close its airspace for 24 hours from 1700 GMT, the country's national transport authority says.

1439 Eurocontrol's Brian Flynn warns of significant disruption again on Saturday.

1311 Just like Bjork, volcano ash is a typically Icelandic export: awesome at first, but gets boring rather quickly

and my favorite

1646 Iceland's volcanic eruption, if it sets off the nearby, much larger Katla volcano, could continue for more than a year, prompting long-term flights chaos.

Under the circumstances, it seems like a good opportunity to kick back, grab a good book, and chill.  Life has been way too hectic of late, and this could be just the heaven-sent (enforced) break I need.

Hoping for sunshine tomorrow…

Springtime under the volcano

Airlines have cancelled flights across northern Europe due to the volcanic ash from Iceland (jokes comparing it to IceSave are already circulating).

But it’s had no effect on our first, lovely spring day here in the Village by the Maas.  The trees are finally budding, temperatures have soared, and everyone is out to soak up a bit of the sunshine.

  

 

It’s complicated (ctd…endlessly)

I’m wrapping up a major re-configuration of my living arrangements leading up to a big swap of domiciles (domicilia?) and adding transportation at the end of the month. 

It’s been about six months since the notifications that forced all of the changes.  My company in the UK was awarded a major (and much appreciated) research grant, but it required me to spend about a third of my time in Cambridge running the project.  Meanwhile, the Dutch business was making steady progress and breaking even with consulting revenues as it approaches it’s first full year in business.  I want to keep one foot in the Netherlands and good links to the US.  But my landlady, 87 and with the prospect of heart problems, asked that I vacate within six months so that she could put a caregiver in place.   And, as fond as I am of my road-worn Locomotief fiets, it isn’t much good for getting to the ferry docks for England.

My strategy was to downscale the Dutch apartment, using the excess cash to support a pied à terre in England, taking pressure off of renting room at the College for 50 gbp / night.  I didn’t want to make long-term commitments for either rental; the business hits some crucial milestones this summer and I qualify for permanent residence status in the Netherlands next year, able to buy property, so I don’t want to long-term leases or furniture purchases.  I also needed to get a car to move between the two jobs each month (and provide some weekend mobility during the summer days to come), but don’t want to live for eternity with the wheels I can afford today.

So, after much work, it’s coming together.

• In the Netherlands, I’ll move directly across the river to a furnished (and cheaper) flat, adding a bedroom/office and retaining the view of the iconic Stone Bridge.

From here…..>

<…..to here

• In England, there’s a small, furnished spot in the village of Barrington, just southwest of Cambridge, fronting on the village green and with space to walk and ride.

 

• And I’ve found a 2-year, 30 km/yr lease arrangement on a blue Ford Fiesta that is about 2/3 what the dealer bid. This came after both banks turned down my loan request, saying that the business needed three years of working history before they would consider it.
• <-- My mind’s eye view of the smokin’ hot little bug.  Sadly, reality is more like:

  It’s still a bit wobbly in spots: my landlady is threatening to hold me to a June exit; the lease company wants to review my business plan, and I’m leaving for the US for 10 days on Sunday.  But, it’s progress…

…and complicated.

Voordeelurenabonnement

I may not be able to pronounce it, but this has been one of the best discounts going for the past year.

The Voordeelurenabonnement is the NS “Off-peak discount pass”: it’s good for 40% off the price of all Dutch rail travel during off-peak periods.  It costs 55 euro and is good for a year; apply at the NS desk at the train station, bringing a passport photo and cash.  In about three weeks, the permanent pass arrives and you’re good to go.

It took me a few tries to understand that “off-peak” is not the same as “not during rush hours”.  In the US there would be morning and afternoon restrictions: in the Netherlands you simply can’t use it before 9 am (except weekends and in July and August, when the discount is good all day).  I shaved it too close on one trip up to Endhoven and the conductor asked me to leave the train at Weert, 15 minutes shy of the stop, to purchase a new ticket (he relented as I stood, sniffling, at the door).

40% off really adds up over the course of the year, and the discount can be applied to two friends traveling with you.  For an extra 15 euro, the card can be extended to RailPlus, securing a 25% discount on rail trips throughout Europe.  However, as I found when I showed it baffled UK and Belgian ticket agents, it’s only good for trains originating and terminating in the Netherlands, and not the Thayles or Eurostar.  A pity.

When the Voordeelurenabonnement arrives, it is embedded in a personal OV-chipcard, the paperless ticketing system coming online throughout the Netherlands.  Similar to an Oyster card in the UK, it’s a swipe-and-go pass for paying for public transportation, whether by tram, metro, train, or bus.  Load money onto the card, then wave it over the kiosk at the journey’s start, and again at the destination.  The sensor lights up as the card is read successfully, and the fare is deducted from the card balance with the discount applied.

The card has to be registered online (not at the station) before starting to use it.  First go to Mijn NS to register the card, then to Mijn OV to connect it to a bank card.  Finally, once it’s set up, you need to back through the OV site to approve the privacy policies before it starts logging your travel.  The registration sites are entirely in Dutch; I enlisted my bookkeeper to walk through it with me.  The information is useful if you want to print transaction histories for reimbursement and recharge the card online.

Overall, the Voordeelurenabonnement is a great deal and getting an OV is a nice side benefit.

Too old for Facebook?

Settling in for a long flight cross-country, I introduced myself to the person alongside, discovering that they were expert in consumer market research.  We talked briefly about the best ways to reach people, whether methods differed between the US and Europe, how approaches should change along the Know-Like-Trust progression.

Then, in the Financial Times, from Unilever’s marketing director:  “We have a “lost generation” of brand managers who do not understand the web and social networks.”

“If you are 25 or 20, you know this stuff – you are brought up with Facebook and YouTube. If you are 50, you see your kids do it..(so) Unilever has encouraged its staff to use sites such as Twitter and Facebook themselves, to understand them better and help them “live the space”.

I remarked that this seemed like a pointless remedy.  My seatmate (35ish) agreed: social networks would not be a natural way for people my age to communicate and probably couldn’t be learned intuitively enough to use it effectively.

In principal, I agree that a few hours or a few days learning how to post messages or make friends will not prepare anyone for using the medium to communicate brand messages.

However, its also easy for youth, with an understanding of the media but less experience with people, to fall into naive mistakes as happened to Habitat on Twitter.  I  wouldn’t outsource my branding without understanding and oversight.

“(It’s) really rapid catch-up. We built our business on brilliant use of television. You can’t immediately change your competence…”

Maybe so.  But it’s also a mistake to assume that the 50-something next to you knows less about social media than you do.

  We jousted, and learned from one another, through the first round of drinks and into the meal service.