Important step forward for Dutch pension agreement

6 July 2020

Around the summer of 2019, the Cabinet and the social partners concluded an outline pension agreement. They then continued to negotiate for another year on the details of that agreement. But on Friday, June 12, 2020, the cabinet and social partners agreed on this as well.

Minister Koolmees sent an outline memorandum to the Lower House on June 22. This contains the broad outlines of the pension agreement. The government's planning is that the legislation will be on paper by the end of 2022.

The intention is to introduce the new system between 2022 and 2026.

What will this mean to you?

Mars is now going to study with the pension fund exactly what the law will look like. We find out what it means for the already accrued pensions. And what the future pension plan should look like.

In other words, we do not yet know the consequences for your pension. What we do know is that retiring early will remain possible in the future. Nothing will change in the first few years.

In the coming months, the Ministry will further develop the plans. As soon as more relevant information is known, we will share it on our Mars Pension Fund website.

Pension agreement in broad strokes

According to the negotiators, this will make the pension system clearer and more personal. It will also be more in line with developments in society and the labor market. They also believe it will allow more room for increasing pensions (indexation).

No longer a promise

Not everything is known yet. What is clear, however, is that in the new pension system it is not the pension payouts but the pension contributions that are central. Participants will no longer know in advance how much pension they will receive later.

The level of the pension payout will no longer be a promise. Therefore, deficits can no longer occur either.

Building up an asset

In the future, a participant will no longer build up a pension, but an asset. These assets will be managed by a pension fund. The exact amount of the pension will not be known until the pension commences. In the meantime, however, an estimate is always made of what the payment might be. That is no longer a promise.

The payout depends more on developments in the stock market. This applies not only to participants who are accruing pension, but also to pensioners.

Rules for reducing pensions remain less stringent

During the negotiations, reducing pensions was also discussed. Because of the corona crisis, many pension funds are not in good shape. The rules for reducing pensions were temporarily relaxed last year to prevent reductions. The minister said that the rules that applied last year will remain in place for another year.