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We're in for a shock: pensions worth much less than most expect

Sunday 09 December 2012

Most Dutch workers will end up with a pension worth around half their last-earned salary, not 70% as most people think, the Volkskrant reported at the weekend.

Research by pension management group Syntrus Achmea shows pensions have been reduced by between 15% and 35% over the past 15 years because of a mixture of new rules and pension fund changes.

The biggest change dates back to 2002 when many pension funds moved from a final salary to an average salary basis. Other changes include the increase in the state pension age and the government's plans to reduce the amount workers set aside for their pensions.


In particular, young people will be hard hit, the research shows.

The financial crisis since 2008 has also led many funds to put up premiums and cut pay-outs or scrap the inflation increase. This has not been included in the Volkskrant's calculations.

The financial services watchdog AFM says most people will have a total pension of between 50% and 60% of their final salary, including the state pension (AOW).

The government is encouraging pension funds to now make the switch from defined benefits to defined premiums, giving funds more freedom to increase and cut pensions in line with stock exchange developments.

How much pension do you expect to have? Use the comment form below.

© DutchNews.nl


Readers' Comments

strangely enough, just one week ago I sat in a cafe and listened to a Dutch friend go on and on about 'the Americans' and how sad it was that they had let their entire pension system deteriorate. I asked her if she realized that precisely exactly the same thing was happening here, and set to get much much worse. She relied, 'no I don't believe that will happen here'
Perhaps this stubborn 'block out the truth' attitude is part of what is preventing these bad things from happening in NL? Face the truth, whatever happens here, always happens in the US first. This makes predicting the future of NL quite easy.

By B | 10 December 2012 11:54 AM

The perfect Ponzi scheme is when those at the bottom are by law made to pay into one of these rotten funds to keep the whole illusion going.

By Dr Ponzi | 10 December 2012 3:48 PM

Well that's what happens when you invest in non runners like Facebook & ping-pong balls: next time try tobacco & weapons!

By The visitor | 10 December 2012 6:34 PM

After 30 years of Federal Service in the U.S., my pension will calculate to approxmately 46% before taxes. The Federal pension is a dual payment which includes the U.S. Social Security program payments. The actual Federal pension is only 30%, before deductions. Now the House and Senate are debating cuts to programs associated to Social Security. In the U.S., you have two choices, keep working until you die, or retire into poverty. Unless you are one of those with old money and wealth, then one enjoys the benefit of the so called "American Dream". I've only 4 trips to The Netherlands, and would give most all my pension to just live comfortable during pension years. Currency differential makes that impossible.

By Married a Dutchie 2009 | 10 December 2012 6:46 PM

Well, at least Dutch citizens even HAVE a pension program, unlike us Americans. Pensions are a rarity these days...virtually unheard of except for the very, very wealthy (who, ironically, don't really need the money to survive.)

By Lisette | 10 December 2012 8:51 PM

Dr Ponzi is right. Why pay to a pension that will give you worse return than a bank saving account?

By ufo | 11 December 2012 8:53 AM

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