Millions of Dutch workers will receive a one-time increase in their pensions as funds are transferred to the new system.
Millions of workers in the Netherlands are expected to receive a one-time increase in their retirement savings by the end of the year, as pension funds begin transitioning to the new system known as pensioenstelsel. This increase aims to compensate workers who may be adversely affected by the new rules, particularly those in their forties and fifties, after the end of the intergenerational redistribution mechanism.
In the old system, younger workers partially contributed to building pension rights for older colleagues. This mechanism will disappear in the new system, where pensions become more closely linked to individual contributions. According to economist and senior pension specialist at Rabobank, Leontine Tourier, there is a category of workers who contributed additionally in the past but will not benefit later from the contributions of the new generation after the transition to the new system.
Several major pension funds are set to transition to the new system by the end of this year, including the healthcare fund PFZW and the construction sector fund bpfBOUW, along with many smaller funds. In total, about 9.5 million pensions will be converted on January 1, 2026, with all funds expected to complete the transition to the new system by January 1, 2028.
Compensation will be added directly to the pensioenpotten (individual pension accounts) when the assets of the funds are distributed according to the new rules, without any cash payments. Eligibility primarily depends on age, as younger workers typically do not receive compensation, while older workers benefit. Age limits vary from fund to fund, with the PFZW fund starting at age 30, the PME metals fund starting at age 38, while the ABP civil servants fund uses different criteria.
The compensation amount varies based on age, salary, future pension growth expectations, and the financial situation of the fund. The PME fund estimates that a 52-year-old worker earning an annual gross salary of 60,000 euros could receive a one-time payment of about 18,000 euros, with actual figures varying. The PFZW fund calculated that a 50-year-old person receiving a compensation of about 13,000 euros could later receive an increase of approximately 86 euros in total monthly pension income.
In contrast, not all workers enjoy the same protection. Individuals who plan to reduce their working hours or change jobs may face the risk of losing part or all of their compensation. The calculation of compensation is partially based on the salary in the last year before the transition, and moving from a fund that has not yet changed its system to a fund that has already completed the transition may lead to a total loss of compensation. Workers in funds that will transition later will receive compensation after meeting mandatory reserves and ensuring the protection of current retirees.