The title of Herman Kappelle’s farewell lecture is a quote from the man himself. In the 20 years that he taught Tax Pension Law at Vrije Universiteit Amsterdam, he told his students countless times: “Don’t ask me to explain that it makes sense, because it doesn’t.”
Over the course of those 20 years, the tax landscape surrounding pensions changed dramatically. Legislators regularly used the fiscal framework for pensions as a policy instrument. For example, the government encouraged longer working lives by reducing the maximum tax-facilitated accrual rate per year of service from 2.33 to ultimately 1.875, raising the official pension age to 68, and abolishing tax benefits for early retirement schemes (VUT and pre-pension). These measures didn’t make things any simpler—and sometimes not any more logical either. In his lecture, Herman Kappelle sets out to identify the most illogical provision in tax pension law. However, it is not these increasingly strict fiscal limitations that deserve that label. Though the ongoing narrowing of the fiscal framework may occasionally feel unfair to some, it is not illogical.
The same goes for Article 19b of the 1964 Wage Tax Act and the double taxation involved in Early Retirement Arrangements. Not illogical—perhaps somewhat unfair and certainly open to revision and improvement—but not illogical. So which provision is it then? Kappelle reveals that in his farewell lecture. And along with it, he proposes a solution to resolve this illogicality.