Pension Netherlands 2026: The Netherlands will have a sweeping reform of its pension system, centred around the themes: i). increased transparency, ii). fairness, and iii). adaptability to modern life.
In the Netherlands, the Dutch pension system is built on three essential pillars, each designed to ensure financial security for individuals in retirement. These include the Dutch state pension [AOW], company pension scheme, and private pension plans.
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The Three Pillars of the Dutch Pension System
The Dutch pension system operates on three key pillars, providing a combination of state, company, and private pensions.
1. General Old Age Pensions Act [AOW]
The first pillar is AOW, the Dutch state pension, a basic income provided by the government to everyone who has lived and worked in the Netherlands.
The Dutch state pension provides a basic income, the level of which is linked to the statutory minimum wage. The General Old Age Pensions Act came into force in 1957 and is the foundation for the old age pension benefits.
This first pillar is a pay-as-you system. This means that the costs of the Dutch state pension are paid by social security contributions and additional funding coming from government public funds.
2. Company Pension Plan
The second pillar is a company pension plan, as employers in the Netherlands could offer a pension scheme. Companies are not legally required to implement a company pension plan, unless the government has made a pension scheme mandatory for en entire profession or sector.
When a company pension scheme is introduced it is the Defined Contribution (DC) scheme. The retirement income received depends on the savings accumulated during the working years for the company.
When a company decides to offer a pension plan to its employees, it typically works with external providers such as pension funds, insurers, or brokers to establish and manage the pension scheme.
Pension funds are legally and financially independent and the financing is through capital funding. This means pension is financed by the contribution of employees paid in the past and from the return on investment of these contributions.
Types of Pension Funds
1. Industry-wide pension funds: These funds serve entire sectors, such as construction, hospitality, or retail.
2. Corporate pension funds: These are pension funds set up for employees of a specific organisation.
3. Independent pension funds: These funds cater to self-employed professionals, such as medical specialists or dentists.
3. Private Pension Plans
The private pension plans are voluntary contributions made by individuals through private pension funds. The funds are offered by banks and insurance companies. They serve to top up the Dutch state pension and company pension scheme pensions.
The New Pension Framework: The Future Pensions Act
The Dutch Parliament and their social partners have reached an agreement on reforming the pension Netherlands system. This is a future-proof and balanced pension system.
The labour market is changing and over the past ten years people have become increasingly flexible in their way of working and living. However, the pension system has remained basically the same.
The Future Pensions Act [Wet toekomst pensioenen, Wtp] entered into force on July 1, 2023, marking the beginning of a four-year transition.
All pension funds must adopt the new approach by January 1, 2028.
A pension fund is the organisation that administers pension plans for employees. The fund collects contributions, invests them, and ensures that pensions are paid out when employees retire. In the Netherlands, many industries have sector-wide pension funds (e.g., the ABP for government employees and teachers, or PFZW for healthcare employees).
Pension Netherlands 2026 – Age
The state pension age is 67 years in 2026 and in 2027. Starting 2028, it increases to 67 years and 3 months, until 2030. From 2030 onward, it will dynamically adjust based on life expectancy.
Under the new Dutch pension system, the entry age for participating in an employer’s Company Pension Plan is 18 years.
- Before 2024: Most pension schemes began accruing from around 21 years old, with older employees sometimes starting later.
- Since January 1, 2024: All employees aged 18 and older can begin building employer-sponsored pension rights.
NOTE: Some industrial pension funds (via collective labour agreement, CLA) may still have fund-specific rules. Therefore, always check the CLA or pension fund terms and conditions for details.
Key Changes of The Future Pension Act
- Abolishment of the Defined Benefit Plans to Defined Contribution Pension Schemes. Shift from pension entitlements to a Defined Contribution Model, where every participant maintains an individual pension account.
- Uniform Prescribing flat rates, premium rate across all ages, no longer based solely on age.
- Enhanced transparency via accessible personal pension accounts that clearly display contributions, performance, and balances.
Pension Netherlands 2026: One-Time Pension Boost
A significant feature of the transition is a one-time pension boost delivered at the end of 2025, beginning of 2026, to compensate those in their 40s and 50s who contributed under the old, redistributive system.
The previous Netherlands pension system had younger employees partially funding older participants. That cross-generation subsidy ends under the new rule. Those who contributed will not benefit from future younger employees during their retirement receive compensation.
Around 9.5 million pension accounts will switch on January 1, 2026 to the new pension system, including those managed by major funds PFZW and bpfBOUW. The one-time boost is calculated based on age, salary, and expected future accrual, factoring in the fund’s financial health. The one-time boost is paid directly into individual pension pot, and will not be paid out in cash.
ACTION: Review any personal calculations or communications from your pension fund, especially if you are in your 30s to 50s. If considering a job change or shift to part-time, check whether your compensation eligibility depends on current fund status.
Overall Impact Netherlands Pension 2026 and onwards
- Greater fairness: Ending intergenerational subsidies enhances equity between younger and older employees.
- Flexibility: For employees who change jobs frequently or work part-time, pension rights now follow individual accounts more easily.
- Responsiveness: Pensions grow with good markets and adjust downward in stress—but with safeguards in place.
- Personal accountability: Clear insight into contributions and balances encourages greater understanding and planning.
Pension Communication Act [Wet Pensioencommunicatie]
The Pension Communication Act mandates that employees must be fully informed about their pension entitlements in a clear and understandable way. This includes the use of platforms like Mijnpensioenoverzicht.nl and the 123 Pension Plan communication system.
HR Services – Pension Netherlands 2026
While pension brokers are essential for setting up and managing the financial side of your pension plan, an HR Services firm could support your organisation from a People & Culture perspective. From managing the project timeline to communicating the benefits and providing ongoing training, the HR firm ensures that the pension plan rollout is seamless, well-understood, and embraced by employees.
