Netherlands Minimum Pension Entry Age Lowers to 18

The Netherlands passed a new pension law this year, and it came into effect on July 1, 2023, with employers having until January 1, 2028, to adjust their pension plans to comply with the new pension regulations. Due to the announced system change, a specific adjustment (within the overall package of measures) has been somewhat overlooked and requires employers’ attention.

This change involves lowering the entry age for pension accrual from 21 to 18 years. In most pension schemes, the entry age is currently 21 years. Employers will need to adjust their pension plans by January 1, 2024.

What does this mean for defined contribution plans?

Due to tax rules, an additional age category in the contribution table is required to allow for the enrollment of younger employees from the age of 18. This change brings up a few questions, including the following:

• What premium percentage will be applied for this age category from January 1, 2024 (considering the existing scale)?
• How will this adjustment impact the overall pension premium burden, depending on the influx of young employees now and in the future?
• Is an adjustment to employee contributions desirable?

What should employers do?

Insurers will take the initiative and propose adjustments. The pension advisors at Schouten Zekerheid will contact their clients once the adjustment proposal is received to discuss and explain it.

For more information on the Netherlands pension reforms, please refer to Schouten Zekerheid’s pension white paper. If you have any questions about adjusting your Dutch pension plan, please contact Asinta, and we will put you in touch with the local pension experts at Schouten Zekerheid.