As a result of the financial crisis, low interest rates, ageing population and increasing life expectancy, pension systems throughout Europe are facing challenges.

The Dutch pension system consists of three pillars:

  • the old-age pension or state pension, based on the General Old Age Pensions Act (AOW).  The state pension provides for a basic income, the level of which is linked to the statutory minimum wage
  • collective pension schemes administered by an insurance company or pension fund
  • individual pension products.

Recently the AOW has been amended.  First of all, effective from 1 April 2012, the start date of state pension has changed.  The AOW becomes payable not on the first day of the month on which the person reaches the state pension age but on the day of his birthday.

In addition, on 10 July 2012 the Dutch Senate adopted a bill on the increase of the state pension age and the target retirement age for tax purposes.  The state pension age will be increased by one month with effect from 2013, after which it will increase step by step each year, to 66 in 2019.  In 2023 the retirement age will be 67, after which it will be linked to life expectancy.  In addition the target retirement age for tax purposes has been increased to 67 years with effect from 1 January 2014.

As a consequence, as from 2013 the state pension age will be 65 years and one month, although the pension regulations still refer to 65 being the pensionable age.  This could have consequences for collective pension schemes, pension agreements and other employment agreements, in that amendments may be required to reflect the changes.