Pension system

Under the new pension agreement, or pension law phased in on 1 July 2023, employees build up individual pension assets instead of a guaranteed annual fixed benefit. This means that the amount of the pension depends on investment performance and interest rates at the time of payment. For employees entering employment after the new law is introduced, there will soon be only one pension scheme possible, the defined contribution scheme with an equal contribution rate for all. An existing -insured- scheme can continue for existing members until they all leave employment. An average-pay or perhaps still final-pay scheme is no longer allowed.

From 1 January 2024, the following changes will apply to all pension schemes:

• A threshold period is no longer allowed. A threshold period may continue for a maximum of eight weeks and means that the new employee accrues pension after this period has expired. Pension accrual then takes place retroactively from the date of employment. The latter is where the difference lies with the waiting period where you do not accrue pension retroactively. 
• The minimum withdrawal age is reduced to 18 years. Every employee aged 18 or over becomes a participant in the pension scheme.

The idea of the new pension law is that every Dutch person will have their own 'pension pot'. But will this reform put enough money in people's pockets and thus give them more security? With good investment results, benefits rise faster; with bad results, pensions fall.

With this law, the government has broken its promise of a purchasing power pension. Moreover, the purchasing power of the pension threatens to be at a structurally lower level after 2027. Confidence in and support among pensioners and older workers for the new pension system risks being lost. The government claims that in the new system, pensions can be increased faster from 2027, but that increase will come too late for the average pensioner.

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