Dutch pension system
My payroll agency does not arrange pensions for its employees. As I am not a Dutch citizen, I am having a serious issue with a pension arrangement. Can you advise me on this matter? What should I do to set up a scheme?
What is the pension age in the Netherlands and who is entitled?
The Algemene Ouderdomswet – AOW is a basic state pension insurance scheme. Everyone who lives or works in the Netherlands is insured automatically, regardless of nationality. As a rule, everyone who has reached the pension age and lives or has lived in the Netherlands is entitled to an AOW pension. You will be paid a pension from the day you reach the pension age that applies for you. If you do not live in the Netherlands at that time, you may only get a part of your AOW, depending on the treaties between the Netherlands and the country where you live.
For every year that you are insured, you build up rights to 2% of the full AOW pension. If you have been insured for the full number of years (which is 50) you will get a full AOW pension. If you have lived or worked outside the Netherlands, you are likely to have been uninsured during certain periods and may get a lower pension as a result.
In 2021 the statutory retirement age is 66 years and 4 months. In 2022 it will increase to 66 years and 7 months; in 2023 to 66 years and 10 months; in 2024 to 67 years. As from 2025 the pension age will be linked to the average life expectancy and thus could be greater than 67. Five years before your retirement date, the pension age will be final. You can calculate your expected retirement date on https://www.svb.nl/en/aow-pension/aow-pension-age/your-aow-pension-age.
The AOW is not designed to be a standalone income for retirees in the Netherlands and should be supplemented by a company/occupational pension (labour-based pension) or private pension scheme, or both.