“It is absolutely not true that there is not going to be anything left for young people”

Published on: 4 March 2024

The Dutch population is aging. And that has an impact on all sorts of things, such as the housing market, the healthcare system, the economy, the labor market and the pension system. In a series of articles, we cover these topics using interviews with an expert and with people who are part of the gray wave. This time, APG's actuary Caroline Bruls and entrepreneur Appie El Hatri (61) on the impact of the gray wave on our pension system.

“When life expectancy increases, it affects pensions," Bruls begins. After all, an increase in life expectancy means that pensions have to be paid out for longer. "In the current pension system, the way it works is that if life expectancy increases, the funding ratio decreases. So the financial position of pension funds gets worse. Premiums will also have to be increased for pensions in the future. Or we have to retire at a later age."

Still, Bruls speaks of a robust pension system. “Basically, we have everything set up really well in the Netherlands.” She is referring to the three-pillar model. “The first pillar, the state pension, is there for all Dutch people, regardless of whether you have worked or not.” The system is financed through pay-as-you-go; the working people pay for the state pension beneficiaries. Therein lies a challenge due to the ever-aging population, Bruls acknowledges. “Then there are a number of knobs that can be turned, one of which is raising the state pension age. When it was set at 65, we did not live nearly as long as we do now. In order to balance the ratio between the period that people work and pay pension premiums and the period that they receive pensions, it has been established that the state pension age should move with life expectancy.” Other measures could be an increase in the premium, or reducing the benefit over time. However, the latter seems unwise to Bruls. “There are several reasons for that. That would hit people with small pensions really hard. You don’t want that. Plus, this also directly affects the economy, because seniors’ spending level would drop as a result.”

Supplementary scheme
In addition to the first pillar, there is the second pillar: pension accrual through the employer. “About 90 percent of employers have a supplementary pension scheme. This gives retired employees an additional benefit on top of the state pension,” Bruls explained. The second pillar is financed by capital funding. “This one is therefore less sensitive to aging.”

There is also a third pillar; a pension product in an escrow account that must be paid out no later than when participants reach the state pension age plus five years. Bruls: “These include (tax) regulated pension products and the pension for the self-employed. Some people also include savings or their own home in this pillar. I see that more as the fourth pillar, which can be used if people want to retire early. Then they leave their pension accrual untouched, but sell their house, move down in size, and the money is then used as a retirement provision. Once they reach retirement age, they will receive the state pension and a pension benefit.”

I see houses more as the fourth pillar, which can be used if people want to retire early

Impact of stock market and interest rate shocks
Looking at the statistics, by the way, she says the impact of increasing life expectancy on pensions is manageable. “Especially if you compare it to the impact that fluctuations in the stock market or interest rate shocks have on it. The impact of adjustments to life expectancy is really dwarfed by that.” Incidentally, according to Bruls, APG keeps close track of developments in life expectancy. “Although we are continuing to live longer, life expectancy is no longer rising as fast as it has been in the past hundred years. However, the biggest gains in terms of improving living conditions and health have now been achieved. That projection of life expectancy is updated every one or two years, and thus remains quite current. It has to, because there are obviously constant developments that affect life expectancy.”

Bruls also notes, looking at those same statistics, that, on average, people are retiring later and later in life. “Look, the raising of the state pension age is obviously fueling this. But people who retire early are also, on average, doing so later than, say, a decade ago. Where people used retire at 63, for example, they now do so at age 65.”

Een derde uit eerste pijler

The three-pillar system is not unique in the world, but the good balance between the first and second pillars is. This assures a large part of the Dutch population of an income later in life. “Of the total pension, on average about one-third comes from the first pillar, two-thirds from the second pillar,” Bruls knows. “The same will be true in the renewed system. One difference between the current and the renewed system, however, is that the average premium will disappear.”

The average premium is an equal premium percentage for all participants with equal pension accrual. In simple terms, it means that young people will receive less pension for their deposited contributions in the future. So, comparatively, they are paying too much. So what exactly is the situation? Currently, every 100 euros that a 24-year-old deposits has more than 40 years to create more value. This can be done through investments or interest, for example. But every 100 euros that a 64-year-old pays in in pension contributions has virtually no more time to generate returns, and yet 100 euros from a 64-year-old yields the same pension as 100 euros from a 24-year-old. This is possible because the high returns from young people are also used for the pensions of the elderly. That was a workable system for decades, because most people stayed with the same employer and the same pension fund for a long time. A young person would naturally grow old and would thus be compensated years later by the new young people. With the changing labor market, this system came under pressure. “The elimination of the average contribution in the new regime is also a wise choice in view of the aging population. The average premium becomes higher as the aging population within a pension fund increases, because pension accrual by older participants is more expensive. Everyone has to contribute to that. In the new system, the premium becomes individual. Every euro that young people pay into a pension will go into a separate pot,” Bruls said. She also immediately dispels the myth that because of the aging population there is not enough money left for young people. “That is absolutely not true; not in the old system and certainly not in the renewed system.”

“Martial arts gave me the right mindset to become an entrepreneur"

The Dutch population is aging. And that affects, for example, the housing market, the healthcare system, the economy, the labor market and the pension system. But what does this mean for the people who are aging? Appie El Hatri (61), owner of the eponymous Elhatri sports center, looks back on his career so far and looks ahead to his retirement.


Tucked away on a small industrial site in the Woensel district of Eindhoven is sports center Elhatri. The bright green building, decorated with large photos, catches the eye in the otherwise gray street full of businesses and cars. Inside you can find all kinds of martial arts, fitness and group classes.

Founder Appie El Hatri's love for martial arts started long ago with karate. Appie says: “I was about 13 years old. We lived in Acht, as one of the few migrant worker families. As a boy I was quite rebellious and after my mother's death I needed an outlet. I wanted to fight and brawl. A friend of my father’s took me to karate at a community center. That fighting attracted me tremendously. Judo, boxing, karate, you name it. I also loved Bruce Lee movies."

Valuable skills

Martial arts also helps you develop valuable skills. Appie explains: “It’s not about knocking someone out. It’s actually about respect, discipline and perseverance. You also compete with yourself and push boundaries all the time. And you learn to work together, whether with the trainer or with your opponents. Martial arts really shaped me. It gave me self-confidence and the right mentality needed to run my own business: to take problems and solve them.” Appie eventually became a Dutch Thai boxing (1983) and judo (1984) champion. And recently he received the seventh dan in karate.

From car mechanic to gym owner

Appie is still as enthusiastic about martial arts as he was back then, as a thirteen-year-old boy. How did he make it his profession? “I had all kinds of jobs first; from car mechanic to metal worker to doorman at nightclubs. I did martial arts as a hobby on the side, but at a high level. While my peers went out a lot, I lived for the sport. At one point, some friends asked me if I wanted to teach them. That’s how it started. First it was karate, later also kickboxing. I was able to take over a small building where I taught, in addition to my ‘normal’ job. That was hard work, but I loved it. So it just kind of happened organically.”

Building as retirement

Starting in 2003, Appie was able to make a good living from teaching and decided to go all-out for his own gym. Now he runs a sports center of about 2,000 square meters, with about 1,100 members and several employees and freelancers working for him. His employees will eventually receive pension contributions. For himself, Appie hasn't really accrued a pension. “This here,” he gestures around him, “this building is my pension. I have to make a living from that. When it’s time for me to work less, maybe I can sell it or rent it out. And live off that, in addition to my state pension.”

Transferring knowledge

For now, at least, there is no question of retiring. But, he acknowledges, “there will come a time when I have to take a step back. How do I envision that? Well, I don’t think I’ll ever really quit completely. I can see myself only doing what I enjoy most. For example, only teaching a specific target group.

Meanwhile, I would also like to transfer my knowledge and do something for society. We give clinics to companies, schools, and communities. And children of all nationalities come here. I like that. My ambition is for Elhatri to continue on, even when I’m gone. So, it would be really nice to have a successor at some point.”


  • Name: Appie El Hatri
  • Age: 61 
  • Residence: Eindhoven
  • Marital status: married, 5 children, 5 grandchildren
  • Retirement date: unknown
  • Employers: owns his own business