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Rise of Dutch state pension age to pause at 67 in 2024

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The planned gradual rise of the Dutch state pension (AOW) age is to pause at 67 in 2024 as the expected increase in life expectancy is slowing down.

In a letter to parliament, Wouter Koolmees, the country’s minister for social affairs, said the decision was made following new prognoses by Statistics Netherlands (CBS) for the average remaining life expectancy of a 65-year old.

According to the pensions accord in June, the – earlier decided – increase of the AOW age would decelerate to 67 in 2024.

At the time, the trade unions, employers and government further agreed that the official retirement age would rise by eight months for every year of additional life expectancy as of 2025.

Further increases to the AOW age as of 2025 would be implemented in annual three-monthly steps, with each rise to be announced five years in advance.

The pensions agreement stipulated that a rise to 67 and three months in 2025 would require an increase of life expectancy of 4.5 months relative to 2024.

According to Daan Kleinloog, actuary and partner at consultancy Sprenkels & Verschuren, the prediction by CBS amounted to a rise of no more than 1.5 months.

In 2025, a 65-year old is expected to live 20 years and nine months on average, CBS said.

Currently, pension funds must base their calculations for future pensions on a target age of 68.

Kleinloog said that, based on the new CBS figures, a rise of the target age to 69 was unlikely to be necessary before 2029.

“And if the system changes in line with the pensions agreement, it could even shift to 2033,” he added.

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