Netherlands sticks with pension age rise despite longevity trend

By On August 21, 2018

Netherlands sticks with pension age rise despite longevity trend

The Netherlands intends to press ahead with raising its retirement age to 67 in 2021, despite actuaries arguing that such a change is not necessary until 2026.

Wouter Koolmees, the Dutch social affairs minister, responded to parliamentary questions about the retirement age rise last week.

In 2013, politicians decided that the state pension â€" or AOW â€" age would rise to 67 in 2021. However, Gijs van Dijk, of the Dutch Labour party (PvdA), highlighted an article in financial newspaper FD quoting Dutch actuarial association Actuarieel Genootschap (AG), which stated that longevity of 65-year-olds had increased less rapidly than expected in recent years.

However, Koolmees responded that the increase should be seen as ‘catching up’ with earlier trends. Life expectancy compared with the 1950s has risen sharply in the Netherlands, while the state pension age has remained 65 years for a long time.

At the start of the AOW system in 1957, Koolmees said, retirees received the state pension for an average of 14.7 years. By 2014, that had risen to 19.8 years.

Wouter Koolmees

Wouter Koolmees, social affairs minister

With the increase in the state pension age to 67 in 2021, Dutch retirees will receive the benefit for roughly 18 years on average. The government intends to link the retirement age to life expectancy to maintain this duration from 2022.

Those who retired between 2006 and 2020 would receive their state pension on average for longer than 18 years, the minister said.

In addition to affordability, Koolmees also mentioned labour market arguments for raising the AOW. He said there had to be a balance between working people and pensioners in the Netherlands in order to guarantee that there would be a large enough workforce in the future.

Koolmees acknowledged the actuaries’ argument but added that CBS, the Dutch government’s statistics body, believed the reduction in longevity improvements was temporary and life expectancy would continue to rise over time.

In 2017 there were fewer retirees claiming the state pension for the first time than the Netherlands’ government had anticipated. This was expected to save the country €30m a year, according to government estimates, but Koolmees warned that such forecasts were uncertain.

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Source: Google News Netherlands | Netizen 24 Netherlands

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