Pensions

The coalition parties are aware that the current pension system is no longer in line with the changing labour market. Increasing life expectancy, the financial crisis and low interest rates have exposed the vulnerabilities of the system. Rutte III wishes to renew the pension system on the basis of the proposal from the Social and Economic Council (SER). The government considers the following measures essential in order to realise a new pension system by 2020:

Personal pension assets with collective risk sharing

Social partners have to develop a pension contract that takes personal pension assets into account. A collective pay-out phase in which the risks are shared remains in place. Rules are imposed on any collective buffer for the longevity risk and investment risk. 

Abolition of average pension contribution system, age-independent contribution becomes mandatory

The average pension contribution system will be abolished. There will be a switch from an age-independent pension accrual to an age-independent pension contribution. Participants receive accrual that is in line with the contribution paid in. This means that pension accrual decreases as people grow older.   

Retention of mandatory participation and collective administration

The basic principle of collective administration remains in place. Mandatory participation in sectoral pension funds and occupational pension funds remains in place.

Perhaps adjustment of pension framework under tax law

The government will later investigate whether it is possible only to apply limitations within the pension framework under tax law on the pension contribution to be paid in.

Adequate risk cover necessary

The renewed pension system must include adequate cover for surviving dependant's pension and disability pension.

More freedom of choice for participants

The renewed pension system should offer participants more scope for freedom of choice. The cabinet will investigate whether it is possible to withdraw a limited part of the pension assets as a lump sum upon retirement. The system should allow self-employed persons the opportunity to join voluntarily.

Support for transition to renewed pension system

The cabinet wishes to support the transition to the new pension system by enabling customisation within certain frameworks, by temporarily expanding the pension frameworks to deal with the transition costs and to facilitate the collective conversion of existing rights into personal pension assets. 

Coalition agreement pensions

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