Pension fund reform again delayed; July 2023 is new start date
New legislation to reform the Dutch pension system has again been delayed and will now not come into effect until at least July 2023, pensions minister Carola Schouten has told MPs.
The previous date of January 1 is ‘no longer realistic’, Schouten said, adding that she is now counting on July 1 next year. The delay, due to slower than expected parliamentary procedures, is to give clarity to the pensions sector, she said.
Pension fund association Pensioenfederatie described the latest delay as ‘on the one hand irritating,’ but said it would give funds more time to adjust to the new system. The legislation should have come into effect in 2021.
Under the new system, pension funds will no longer ‘make promises’ about the size of the pensions they will deliver. Instead, pensions will vary in line with investment returns and life expectancy, meaning the economy will have more of an influence on payouts.
The negotiations on reforming the Dutch system started some 12 years ago and the new system should be up and running by 2027 – if it gets parliamentary approval.
The Dutch pension system is currently based on three pillars – the state pension AOW, compulsory corporate pension schemes – either sector-wide or company based – and individual or private pension schemes.
In the new system, the state pension age will rise less quickly than originally planned, and there will be an early retirement option, aimed at people doing hard physical work.
Secondly, the reforms aim to spread the burden of paying for pensions more fairly across the generations. Corporate pensions will no longer be on based average (wage related) contributions but on everyone paying the same premium.
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