The House of Representatives in the Netherlands has voted in favour of passing the bill for the Future Pensions Act, which will now move to the Senate.

If passed by the Senate, the new law is expected to come into force on 1 July 2023, with pension funds having until 2027 to switch to the new pension rules.

Voting in the Senate is expected to be completed before 1 March 2023.

Deputy Prime Minister and Minister for Poverty Policy, Participation and Pensions, Carola Schouten, also announced that the temporary arrangement that allows pension funds to index at a funding ratio of at least 105 per cent will be extended until 1 July 2023.

The Future Pensions Act includes a package of new pension rules that aim to lay the foundations for an updated pension system, which will shift focus from defined benefit (DB) to defined contribution (DC) style pensions.

To achieve a majority in the House of Representatives, the main amendments and motions of the Green Left and the Labour Party were adopted.

These include three amendments on reducing the number of workers who would not be accruing a pension, with workers to begin accruing a pension at age 18 instead of 21 under the law, while the waiting time has been eliminated, and a quantitative reduction target to halve the number of workers not accruing a pension by 1 January 2028 was introduced.

A motion requesting the government to develop a new early retirement scheme for labour-intensive professions after the current one expires in 2025 was introduced, alongside an amendment to allow a collective benefit scheme for the solidarity contract and an amendment on broadening the default method for converting pension entitlements in the current system to personal pension assets in the new system.

“To be ready in time for the transition as an administrative organisation, it is important that there is clarity about the details of the new system as soon as possible,” commented APG CEO, Annette Mosman.

“The passing of the bill for the Future of Pensions Act by the House of Representatives is an important step towards that clarity.

“We are particularly pleased that the amendments on a collective distribution phase and on broadening the standard method for converting were adopted. Both are important amendments that make the bill more implementable.”

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