Principal Agreement on Reforming Dutch Pension System

freeze state pension age and retire early

June 5, 2019 – Ministers, unions, employers and the SER have reached a principal agreement on reforming the Dutch pension system: a future-proof and balanced pension system. The labor 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. With this agreement in principle, the Dutch retirement provision is being modernised and at the same time, after long discussions  (9 years) there is now clarity about the state pension age.

The agreement involves:

  • Freeze of the state pension age: the next two years the state pension age will be frozen at 66 years and four months. After that, the retirement age gradually rises to 67 years in 2024. After that, the state retirement age continues to rise, but less rapidly than the government initially wanted. For each year that life expectancy rises, the state pension age will increase by eight months. Employers, trade unions and the government are going to investigate whether the state pension age can be linked to 45 years of service in the future.
  • the option to retire early: Everyone can stop working three years earlier. This is particularly attractive for people with a low income. An exception is made for employees with a gross annual income of up to EUR 19,000. For incomes above this threshold, employers must pay a fine on every euro.
  • ruling on freelancers: it will be easier for the self-employed to join a pension fund, but it will not be compulsory. Freelancers will be required by law to take out insurance against becoming unable to work through illness. There may be an opt-out for freelancers who show they have sufficient reserves to support themselves.
  • flexibility in taking up pension: Everyone is given the opportunity to take up part of the accrued retirement pension on the retirement commencement date. This means that it will be possible to take out a maximum of 10% of the pension to,  for example, pay off the mortgage.

The legislative process for the agreements on the state pension age for the coming years will be started as soon as possible so that those changes will take effect on 1 January 2020. The new pension system will start two years later.


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