The House of Representatives has approved by a large majority the new pension law of Minister Carola Schouten (Pensions, ChristenUnie). This clears the way, if the Senate also agrees early next year, for a major adjustment of the Dutch pension system between 2024 and 2027.
In addition to the four government parties VVD, D66, CDA and ChristenUnie, the opposition parties PvdA, GroenLinks, SGP and Volt also voted in favor of the Future Pensions Act on Thursday evening. Together, these parties have almost a two-thirds majority in the House of Representatives and the Senate.
The law regulates an adjustment of the supplementary pensions, for which employees save together with their boss through pension funds, on top of the basic pension, the AOW benefit.
No more promises
Those pension funds will continue to exist, but the way in which employees save for their retirement will change. Now the system still works with future promises. Employees build up an ‘entitlement’ every month: a small part of a future benefit. The pension fund must then ensure that there is enough money for this, in a large, anonymous pension pot.
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In the new system, everyone receives a personal pension pot and everything revolves around the euros that are currently in it. It is only carefully predicted how high your future benefit will be.
Pensioners also receive such a personal pot, from which their monthly benefit will be taken. But that jar can’t run out. The benefit of people who live longer than average is financed with the money left over from people who lived shorter – as is already arranged.
This pension law is a result of the 2019 pension agreement between the previous cabinet and the trade unions and employers’ organisations. That agreement also arranged for the state pension age to rise more slowly since 2020 than before.
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