Pension agreement! Still a long way to go…

8 July 2020

It is hardly possible to miss the messages: there is a Dutch pension agreement. All media have reported extensively on this. But if the current pension agreement is introduced, what will this mean for you? We try to provide more clarity on this in this article.

After more than ten years talking, an agreement

After more than ten years of intensive discussions, employers, employees and the government reached an agreement in mid-June 2020 on a fundamental revision of the pension system in the Netherlands. Important parts of the agreement are that the pension becomes more flexible, but also that you have less certainty in advance about the amount that you receive your retirement date. It is expected that it will take some time before all details of the pension agreement are worked out and determined. Discussions are currently underway to introduce the changes by 2026.

You work for your pension one day a week

Most employees in the Netherlands build up their pension with a pension fund. They and their employer pay the premiums for this. Many people do not realize that these are significant amounts. To give you an idea: on average you work one day a week to finance your pension contribution!
Employees receive a “pension commitment” for these contributions. This means that the pension fund has calculated the amount that the employee receives when he retires. This amount, together with the AOW pension, is intended to enable the pensioner to provide for the cost of living. Because after your pension, these costs continue without you having any income from work.

Certainty that was no longer certain

In recent years, we have seen that the agreement about the level of the pension benefit has become less and less certain. For example, the retirement age was raised. Benefits did not increase with annual increases in the cost of living. But discounts were also made here and there because the pension funds made insufficient returns to actually implement all the commitments. In short: although many employees thought they had a “good” and “certain” pension, it turned out to be a lot less certain in practice.

The key is that payment size is no longer guaranteed in advance

The core of the new pension agreement is that in the future the pension fund will no longer promise to make a payment in euros. The amount of the pension benefit will continue to be related to the average income that an employee has earned during the period that he built up pension rights. However, the exact amount that is subsequently paid out depends to some extent on the return the pension fund makes. If the return is high, a higher pension payment will also be made. However, if the return is low, for example because a series of years the investments yield only a limited return, the pension payment will also be lower.
To prevent one pension participant from receiving a “lower” benefit just at an unfavorable moment, while his colleague who retires earlier or later receives a “higher” benefit, a fund will be introduced to limit the differences to a certain extent. .

Retirement with an insurance company

You can also build up a pension directly with an insurance company. Many self-employed people do this. However, employees can also arrange a supplement to their pension themselves through an insurance company. The difference with pension funds is that you enter into a private law agreement with the insurance company. So this is an agreement between you and the insurance company. The insurer cannot adjust this agreement unilaterally. The agreements you make are binding on both parties. This new pension agreement therefore has no influence on this.

Figures from recent research

A recent survey shows that as many as 41% of Dutch people are concerned about their own pension situation. No less than 70% of the population indicates that they need calculation tools to improve their own pension situation.
Much information about your pension can be found at

Want to know more? We are happy to update you

For many people, retirement is a complicated subject. As a financial advisor, we follow developments closely. We can therefore help you to gain a better insight into your pension situation at the moment. We always advise our clients to pay attention to their own pension situation at a relatively young age. Because precisely when the pension is “still a long way away”, important improvements can often be made in your own pension situation in a relatively simple manner. Improvements shortly before the retirement date often cost a lot of money and are therefore for most people

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