The Netherlands: Retirement: Compliance Update: Age for Retirement in The Netherlands Changes from 67 to 68

Effective January 1, 2018, the retirement age for occupational retirement plans in the Netherlands increases from age 67 to 68. Depending on their current benefit designs, the new retirement age may result in some plans exceeding the maximum level of tax-qualified benefit accrual, unless action is taken before 2018 to avoid this outcome.

Defined Contribution Plans (DC)

For defined contribution (DC) plans contribution rates, as a percentage of covered earnings, are being adjusted from January 1, 2018. These announced rates are preliminary but are not expected to change. Following are the maximum tax-qualified rates, based on a 3% annual interest assumption:

Age	Maximum contribution
employee	of pensionbase 3% interest
20-24	7,70%
25-29	8,90%
30-34	10,30%
35-39	12,00%
40-44	13,90%
45-49	16,20%
50-54	18,90%
55-59	22,30%
60-64	26,40%
65-68	30,50%

Defined Benefit Plans (DB)

The statutory maximum annual benefit accrual percentages for defined benefit (DB) plans will remain unchanged, but as a result of the retirement age change they will be linked with higher retirement ages. The retirement ages and corresponding DB maximum accrual rates, effective January 1, 2018, are as follows:

Retirement	Maximum accrual rate	Maximum accrual rate
age	Career average pay DB Plan	Final pay DB Plan
68	1,88%	1,66%
67	1,74%	1,54%
66	1,61%	1,43%
64	1,50%	1,33%

Consent of Work Council and Employees

The increase in retirement age is a call for action for employers, as retirement plans are part of the Employment Conditions. Any changes in these schemes (including mandatory legislative changes) should therefore be discussed with the Works Council and Employees.

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