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

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.
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