On April 29, 2011, the Ministry of Social Affairs and Employment announced in a press release that the Council of Ministers has agreed to a proposal of Minister Kamp of Social Affairs and Employment and Deputy Minister of Finance Weekers to submit a bill to the Lower House for the increase of the pensionable age to 66 years.
The bill is part of the coalition agreement and increases the age when one receives a state pension in 2020 from 65 to 66 years. The Cabinet has indicated it is necessary for the workforce to continue working for longer due to the shrinking workforce and the increasing number of pensioners. The measure is to take effect as of 2020 in order to provide employers and employees sufficient time to make the necessary arrangements.
Reduction supplementary pension accrual as of 2013
The tax provision for supplementary pension will be adjusted to 66 years as of January 1, 2013. This means that a full pension is accrued over a period of 40 years instead of over 35 years. As the pension is accrued over a longer period of time, the bill includes a reduction of the accrual percentages. As of 2013, people will accrue an annual percentage of 1.75% for their pension instead of 2% for final pay schemes and 2.25% instead of 2% for the average pay pension scheme.
The pension accrual and all accrued pension entitlements up to 2013 remain unchanged. The new rule will take effect in 2013; from that moment on the annual accrual of pension entitlements of an employee participating in a pension fund will be reduced.