In the Netherlands you build up a state pension, called the AOW. Besides that, a lot of people also accrue a pension through their employer. Among other things, the money is invested in equities (shares), enabling it to grow faster.
The pension rules have worked well for years, but that’s now changing. People are living longer. The proportion of people in work to those who have retired is falling. Moreover, people no longer work for the same employer all their working life, but change jobs or start a business more often.
The trade unions, employers and the government have therefore jointly drawn up new rules for pensions accrued through the employer. We want everyone in the country to receive a good pension, and that includes the generations that come after us.
What will remain the same?
Some important principles of the current pension system will remain unchanged.
- We arrange our pension together: employers, employees, and also government. Everyone will continue to accrue their AOW and a large proportion of employed people will accrue a supplementary pension through their employer. So there will still be the AOW and the supplementary pension. You receive the AOW from the state, and after you retire you receive it for the rest of your life.
- We will continue to stand together and share the risks of higher life expectancy, death, and occupational disability.
- We will keep the costs down by building up pensions together and investing collectively.
- Participation in the pension scheme through your employer will remain mandatory. Your employer will continue to contribute to your pension.
What will in fact change?
Pension with agreements on the contribution
The new pension includes agreements on how much money you and your employer will contribute to your pension. That pension is a “contribution scheme” [premieregeling]. In a contribution scheme, employees build up personal pension assets, from which a monthly pension is then paid when they retire. No promise is made in advance about the amount of their pension benefit.
Your pension will move in line with the economy
The new rules will ensure that your pension will increase sooner if the economy is doing well, but it’s also more likely to decrease if the economy isn’t doing well. In other words, your pension will move in line with the economy. Young and old will also receive the pension for which they pay (together with their employer). The new rules also ensure that pension benefits will fluctuate as little as possible.
Greater clarity about your own pension
You will soon be able to get a clearer idea of what you are contributing to your pension, what pension assets you are accruing, and how much pension you will later receive. Each year, your pension fund will calculate what your share is of the total “pension pot”. The investment results achieved in the course of that year will play a part in this. The results will be different each year.
Partner's pension: the same clear rules for all pension administrators
The rules for the partner's pension will soon be the same for everyone. This will make it clearer what your surviving dependent can expect to receive.
What will happen next?
In December, a majority of the House of Representatives voted in favour of the Dutch Future of Pensions Act (Wet toekomst pensioenen). This Act sets out the rules for the new pension system. If the Senate also approves, the new law may take effect as of 1 July 2023.
The employees’ and employers’ organisations will have time to agree on specific arrangements regarding the content of the pension scheme on the basis of the new legislation. Pension funds will have until 1 January 2027 at the latest to adapt pension schemes and administration systems accordingly.
We will update you regularly on progress via this webpage but also with news releases, newsletters, and the Op Koers magazine.