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Long-awaited pension reform plans — based on a defined contribution (DC) system — were presented by the Dutch government and the social economic council. The reform plans (Dutch) are still provisional and must be approved by the membership of the largest trade union.
All pension plans would be based on a DC system, and two options would be offered:
In both options, the provider would need to use a life cycle approach for investment risk. The defined contribution would be based on 80% average pay with an accrual phase of 42 years that would include an age-independent contribution calculated at a (mitigated) market interest rate.
The reforms present some significant transitional challenges because most current plans make the economic value of pension accrual age dependent, and legislation would be required to compensate for the change.
Other highlights include the following:
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