After some 10 years of negotiation on a new pensions system, an agreement in principle has been reached between employers and employees (the social partners) and the government. An agreement on new pension rules was urgently needed.

We are living longer, more of us do not work in paid employment our whole lives and the system is highly dependent on the level of interest rates. The pension agreement was therefore urgently needed. Whether the trade union members will agree will become clear around 15 June. After that, many details of the agreement need to be developed further. The new agreements are not expected to be established in legislation until 2022. This means that, as of yet, we cannot say what exactly this pension agreement will mean for your pension with Stichting IFF Pensioenfonds.

The pension agreement in general:

• The age of entitlement to state retirement (AOW) pension will be temporarily frozen at 66 years and 4 months. After this, the age of AOW entitlement will increase less rapidly than previously agreed. Living one year longer will soon not mean working 1 year longer, merely 8 months.
• People with a physically demanding occupation will be able to retire earlier. The penalty for employers will lapse.
• The amount of pension will be linked to the performance of the economy. This will mean that pension funds can increase pensions faster when the economy is doing well, but also that pensions will be reduced more quickly if the economy is slowing.
• There will probably be no mandatory pension for self-employed people without personnel. There are however plans in preparation so that they can more easily participate in a pension scheme with a pension fund.

End of the average pension contribution system

The average pension contribution system, under which everyone pays the same contribution for the same accrual of pension, will be scrapped. Employees aged around 45 years will soon accrue less pension with the same contribution. Compensation will be needed for this. The reverse applies to younger employees, who will accrue more pension with the same contribution.

Strong elements of the current pension system will remain

The Netherlands has the lowest level of poverty among the elderly compared to other countries. This is due to several strong elements in the system, and these will remain in effect. These strong elements are:

1. Accrual of pension is mandatory for employers and their employees, meaning that many people are accruing a pension in the Netherlands
2. By sharing the risks together, pension funds can continue to pay out pensions for as long as you live, whatever age you reach
3. The pensions system is relatively low cost, since many people participate in it
4. The tax regulations encourage the accrual of pension
5. Pension schemes also offer financial protection to the surviving dependants of pension scheme members and scheme members who become unfit for work