The retirement age for state pension increased to 67 two years earlier
Since 2013, the Netherlands no longer sets a fixed age for retirement. In that year, the government decided to increase the state pension age to 67 by 2023 in phases. However, this increase will be accelerated from 2016. The state pension age will be increased to 66 by 2018 (1 year earlier) and to 67 by 2021 (2 years earlier). This acceleration is necessary due to continued budget deficits and a strong increase in the social security cost.

What do the changes involve?
The AOW state pension retirement age was increased by one month in 2013, 2014 and 2015. As from 2016, the plan was to increase the retirement age by two months each year. The new legislation sets out accelerated implementation. The table below shows the progress in the AOW state pension age.

For people receiving social security benefits, for example WIA (occupational disability) and WW (unemployment), the benefits will continue until the increased AOW state pension retirement age.

Linked to life expectancy
The pension age may rise again in the future. The government will annually review whether this is necessary. As from 2022, the state pension age will be linked to average life expectancy. Actuarial rules governing any further increase have been set out and will remain unchanged. Any rise in the state pension age will be announced at least 5 years in advance. The first time that the government is due to assess life expectancy will be on 1 January 2017. It will then decide whether the state pension age should be adjusted in 2022. The increase amounts to a maximum of three months per year.

Transition scheme
People participating in voluntary early retirement or a pre-pension scheme on 1 January 2013 may be eligible for a bridging payment. This is because they were unable to prepare for the increase in the state retirement age. The transition scheme provides a benefit at minimum level from the age of 65 until the actual state pension age at that time.

The transition scheme is available to anyone with an income up to twice the minimum wage (single people) or three times the minimum wage (people with a spouse or partner), subject to an income assessment. Only people with assets up to a maximum of € 21,330 (single people) or € 42,660 (people with a spouse or partner) are entitled to a bridging payment. The transition scheme will expire on 1 January 2019. Anyone who will be 65 up to and including 2018 can therefore make use of the transition scheme.

Accrual period is adjusted
As the retirement age rises, the accrual period of the pension plan increases accordingly. In the current AOW system, participants can accrue 2 percent of their pension capital on an annual basis. Before 2013, accrual of a full AOW benefit was achieved between the ages of 15 and 65. This has adjusted due to the rise in the state pension age. For example, in 2015, the accrual period is between the ages of 15 and 3 months and 65 and 3 months. This may have consequences for emigrants or people migrating into the Netherlands. This may affect the AOW benefit, which may be lower than expected. Please ask for detailed advice relating to your personal situation.

More information
Silvia Groeneweg will be happy to answer any questions on this issue.