The legislative proposal for the new pension system in the Netherlands was presented to the House of Representatives today. The House of Representatives will consider the bill in the coming period, after which it will go to the Senate. If both agree, the rules will take effect on January 1, 2023. Pension funds will then have until 2027 to switch to the new system.
The bill, which is called the “Future of Pensions Act”, stems from the pension agreement that was entered into in 2019 after over ten years of negotiations. In the new pension system, pensions will move with the economy more easily. Fewer large buffers will have to be built up, bringing the prospect of indexation closer. Members will also gain more insight and clarity about the pension they have accrued. There will also be new rules for survivor’s pensions.
Now that the bill has been submitted to the House of Representatives, the lower regulations - the further details of the bill - will also be made public. The aim is for the Act to be published in the Staatsblad on January 1, 2023, whereupon the rules will officially go into effect. Whether that date will be met is not certain. “It is quite possible that the Senate or the House of Representatives will need more time to pass judgment on the proposals,” says Wim Koeleman, director of Pension of the Future at APG. Koeleman is pleased that the proposal is on the table. “It marks the beginning of a new phase in the system change. But there is still a lot of work to be done. We will be intensively studying the proposal and the lower regulations in the coming period. APG will pay extra attention to the feasibility of the new system.”
One of the new rules of the new system, the option of withdrawing a maximum of 10 percent of your retirement pension in one lump sum at the time of retirement, was supposed to take effect on January 1, 2023. But that seems too soon. The Pension Federation and the Association of Insurers are urging Minister Schouten to postpone the effective date to at least July 1, 2023. Any sooner would not be feasible.
If the new pension law takes effect, pension funds, together with administrators, employers and unions, will have until January 1, 2027 to adapt pension schemes to the new legislation. Koeleman is well aware that this will be an immense operation. “That is why APG, APG’s pension fund clients and the social partners (employers and employees) have already made a start with the implementation, based on a draft version of the law. We are certainly very anxious to see the changes.”