Netherlands: Pension: Compliance: Dutch Government, Employers and Unions Agree on Pension Reforms

Netherlands: Pension: Compliance: Dutch Government, Employers and Unions Agree on Pension ReformsArticle provided by Schouten Zekerheid, Asinta’s Partner in the Netherlands.


After years of negotiations an agreement on pension reform has been reached between the Dutch government, employers and unions about pension age and pension structure.

The two most important unions in the Netherlands, FNV and CNV, are backing the agreement after a referendum among their members.

The pension reform was initiated to change the structure of pension accrual at industry-wide pension funds. Industry-wide (or sectoral)pension funds dominate the Dutch pension market. The majority of industry-wide pension funds administer defined benefit schemes. In those defined benefit schemes pension accrual is based on salary regardless of age. This will change under the new pension system. In this agreement the pension accrual is based on the individual contribution instead of the benefit. With equal premium levels this will result in higher accrual for ‘young’ employees and lower accrual for the ‘older’ employees. Older employees are offered compensation during the transitional period. The aim is that this approach will also apply to pension schemes administered by insurance companies. The elaboration will show what this means for employers that offer a pension scheme that is carried out by insurance companies.

The most important changes are:

  • The state pension (AOW) age will now be frozen at 66 years and four months for the next two years and will then rise in stages to 67 by 2024.
  • After that, the state retirement age will be linked to life expectancy.
  • People will also be able to retire up to three years early. This measure is particularly aimed at people in physically demanding jobs.
  • Part of the pension agreement would also allow workers to take out a lump sum of up to 10% at retirement to help pay off a mortgage.

The transition to a new pension system should be completed by the end of 2020 and the cabinet aims to complete the legal framework for system reform by 2022.