After years of negotiations there is finally an agreement about a new pension-system in the Netherlands. Trade unions CNV and FNV both said ‘yes’ to the pension-agreement that was presented on 5 June 2019.
Pensions these days are one of the most debated topics. Demographic changes, a higher life-expectancy and a pension-system that no longer served the current circumstances, all formed the starting-point for fierce debates that took over ten years. Most people understand that the current system was no longer apt. But what does the agreement mean in practice?
The system as it stand now is based on three pillars. These pillars are the state pension AOW, the compulsory corporate pension schemes and individual or private pension schemes. What was agreed on now is that:
- the state pension age will rise less quickly than it was originally planned to rise. In addition, there will be an option for early retirement for those people doing tough physical work.
- the reforms aim to more fairly spread the burden of paying for pensions. Through that the system will become fairer for all the generations.
The system is welcomed by the social partners event though there will be different effects for the different generations. The way the system works now is that younger generations pay the pension for the older generation. This will now change because of the shift, most probably leading than less pension than expected. There is no clarity yet as to solve this issue.
The members of both FNV and CNV voted in favour of the reform, which should come into force at the start of 2022. The general perception is that it is more future-proof than the current system.