Pension Agreement Netherlands

The essence of retirement is to provide security for income-free living by accumulating work early. From 2022, the AOW retirement age will be linked to life expectancy. Average life expectancy remained more or less unchanged. Due to the change in retirement age, verzekeringsbank Corporation (SVB) is offering a retirement age calculator in the Netherlands to find your retirement age in the Netherlands[9] It is possible to retire early, but you must fund the period up to the official retirement age. You can also apply for your old age pension to be paid at a young age, but the benefits will be much lower because they have to last longer. If you wish, you can also retire later, with the potential to significantly increase your pension benefits. In most cases, a partner is entitled to a survival benefit (nabestaandenpensioen) under the National Survivor Benefits Act (Algemene Nabestaandenwet, Anw). This is subject to certain conditions. If someone dies, their partner receives a portion of their pension rights. The public pension plan (AOW) is managed as a pay-as-you-go system, with public funds and payroll taxes funded there. Anyone who has lived and/or worked in the Netherlands between the age of 15 and 65 is entitled to an AOW pension. Everyone living in the Netherlands is insured, with a few exceptions, and every year people are insured, they are entitled to 2% of the AOW full pension. The full AOW pension is linked to the minimum wage, with married or cohabiting couples each earning 50% of the minimum wage, while singles are entitled to a pension worth more than 70% of the minimum wage.

As in many countries, when you are entitled to the pension, the retirement age is gradually reduced by the Dutch government: the Dutch pension system combines a distribution system in which workers pay for pension benefits and an individual investment system. Groups and individuals active in the individual investment system invest risky and low-risk investments to repay the amount they receive from the state pension. These different models can be considered as the three pillars of the Dutch pension system. Most large pension funds currently have a financing rate well below the 100% required. Social Affairs Minister Koolmees refused to rule out any pension cuts during the transition to the new contract, which runs until 2026. During the debate, several opposition parties presented proposals calling for the abolition or delay of pension reform, which were rejected. In line with the draft reform published last month, pension funds have discretion over the occupancy and use of the solidarity reserve. Pension funds must provide their members with adequate information about their pension so that they know what awaits them in retirement. This information should also clearly indicate the financial impact of any decisions that participants may make or changes that may occur in their personal circumstances.

The information is provided by your pension fund via Mijnpensioenoverzicht.nl (in Dutch). Are you an entrepreneur working in an industry with a mandatory pension fund? Then you have to participate, even if you are independent.