The Netherlands scores very high in international rankings on the quality of the previous pension system … and yet, on average, the Dutch had little confidence in their pensions. Older people felt they were disadvantaged because ‘promises’ were not kept. Younger people had the feeling that the pot would be empty when they could ´finally´ enjoy their pensions.
In doing so, the collective pension system is and has been under pressure due to:
- The sensitivity of invested funds to large fluctuations in the financial markets: the COVID-19 crisis is one example;
- The fluctuations in interest rates that are becoming more frequent;
- The increase in life expectancy, which ensures that the period in which we receive a pension has become longer and longer. This is nice, of course, but pensions have also become increasingly expensive as a result;
- Changes in the labor market: People no longer automatically work for the same employer all their lives, more and more people also decide sometime during their working life to look for another job or to work for themselves (e.g. as self-employed).
As a result, the pension system we devised in the middle of the last century no longer delivered what many people expected from it. Change was therefore necessary.
Therefore, in July 2020, the Pension Agreement was concluded. This agreement was subsequently enshrined in a bill, the Future of Pensions Act. This law only affects pensions accrued through employers. Your pension with SPIN, for example.
The law took effect July 1, 2023. Implementing organizations such as SPIN have until no later than Jan. 1, 2028, to adjust implementation and regulation to comply with the law.
The new Future Pensions Act is going to make pensions in the Netherlands look different. Members of most pension funds will have their own ‘pension pot’ from which their pension will be paid. And pensions will move more directly with the financial markets. Changes are coming, but many things will remain the same: income will be provided after you retire, in the event of occupational disability and for your dependents after your death. And if a pension fund, like SPIN, chooses not to convert accrued pensions to the new pension plan, nothing will change for those pensioners, for example.