New Dutch government plans to modernise pension system by 2020
Written by Tineke de Vries
The new Dutch coalition government plans to introduce individual pension pots and a move from average to age-related pensions accrual.
An agreement with the social partners needs to be reached in 2018, so that legislation can be written afterwards, the new government said.
In line with an earlier study by the Social Economic Board, the four coalition parties plan to introduce individual pension pots to replace the current shared pension pot out of which all retirement incomes are paid. However, risk will continue to be shared among all members.
A move to age-related pensions accrual will mean that young people will build up more pension rights than older people for the same amount of premiums. The change is estimated to cost current scheme members around €60bn, the Financieele Dagblad writes.
The biggest disadvantage will be to people who are now between 35 and 50 years old, while new generations, who are currently paying no or very little premiums, will benefit. The current pensioners will see no impact. It is still unclear how the government plans to compensate for these costs.