Why are we getting a new national pension system?

The Dutch pension system is one of the best in the world. And yet, it needs to be updated because society has changed enormously. We also want people’s pensions to be better able to withstand shocks when there’s a downturn in the economy. And we want people to better understand what they have in their personal pension pot. Employers, employees, experts and the government are working together to achieve that. We aim to keep the good elements and to resolve the bottlenecks.

Switching to a new employer
In the past, it was quite normal to work for the same employer your entire life. That’s no longer the case. There may be times when we work less or not at all, or as a self-employed worker or under a flexible contract. The new pension system will take into account the current labour market.

Adapting to the economy and society
As a nation, we have built up a huge pension capital that's sensitive to economic changes. Low interest rates, for example, or major fluctuations on the stock markets. We’re also growing older than in the past. It's important that our pension system is able to adapt to such developments.

Pension is something we do together
The most significant elements of the old pension system are being kept. You’ll get a pension when you retire, that will not change. You'll get a pension from your company pension plan and a pension from the Dutch state (AOW) for the rest of your life. And we will continue to share the risks – that's important should you become ill or occupationally disabled.

Bottlenecks are being resolved
The new pension will follow trends in the financial markets more closely, meaning that in good times pensions will go up, while in bad times pension cuts will be spread. The notional interest rate will be discontinued and funding ratios will no longer be applied.

Your pension contribution will be saved into your own pension assets: your personal pension pot. This pot will consist of funds which you and your employer pay for together. Going forward, you’ll be able to see how much you've saved into your pension and how much you can expect to get in terms of pension benefits when you retire.

In the present system, all pension plan participants, young and old alike, get the same pension increases and pension cuts. In the future, these amounts will rise or fall more strongly for younger people. As a result, young peoples’ pension assets will likely grow more quickly and older participants will have more certainty about the stability of their pension benefits.

What is set to change now?
At this point in time, nothing is changing. The new Dutch pension system will take effect on or before 1 January 2027. That will require a new Pension Act, which will need to be ready by 1 January 2023. The new law will contain proposals such as:

• You will build up pension assets instead of pension rights.
• You and your employer together will pay contributions into your personal pension pot.
• The rules for your surviving dependants' pension will be simplified.
• When you retire, you will have an addional option: you’ll be able to withdraw 10% from your pension pot as a lump sum.
• There will possibly be an additional scheme for self-employed individuals, enabling them to build up a pension under the new system.

Read more about the new pension system
Follow our reports on the new pension system on our website. You’ll also find a list of frequently asked questions and answers.