A new pension system. For what reasons?

Pensions in the Netherlands are well organised. A pension consists of 3 parts. You receive a basic pension from the Dutch government if you have lived in the Netherlands - the AOW (state retirement pension). In most cases, you also accrue a pension through your work. Lastly, you can accrue additional pension yourself, with an annuity, life insurance or single premium for example. The pension system has worked well for a long time, but much has changed in recent years.

Why is change needed in the Netherlands?

  • People are living longer
    Therefore, pensions need to be larger and paid out for longer than expected.
  • The low interest rates make pensions expensive
    As a result, more money is needed in order to be able to receive the same pension amount.
  • The labour market is changing
    The current pension system is based on the assumption that people work for the same employer or in the same sector for their whole lives. Everyone accrues the same pension amount for the same contribution. Under this system younger people contribute to older people’s accrued pensions. If everyone works for the same employer for their whole life, this works well. But these days people change jobs increasingly frequently, work less hours or not at all for a period of time or work for themselves. And then the pension system does not work well. Those who leave the pension fund halfway through their career because they go to work for themselves for instance, accrue insufficient pension unless they take additional measures.
  • The trust in the pension system is declining
    The pension amount in some sectors has long ceased to rise with the movements in prices (indexation). Consequently, trust has decreased.
  • There is currently little room for customisation and personal choices.

Therefore, new rules for the pension that you accrue or receive are being introduced. The Pension Agreement outlines the general features; the details are currently being drawn up in legislation. Shell will, of course, have to comply with this new legislation. There is a separate information page especially for Shell employees on the employer website.

Unions, employer organisations, pension administrators and the Ministry of Social Affairs and Emplyment have also launched a website with information on the new pension system: onsnieuwepensioen.nl (only available in Dutch).