NETHERLANDS - Dutch citizens are being offered the opportunity to postpone their state pension AOW by a maximum of five years in return for a higher benefit payout.

The Dutch government has decided payouts will be improved if individuals opt to start receiving their AOW later than the official retirement age of 65.

The change - proposed by State Secretary Achmed Aboutaleb of Social Affairs - is designed to bring about at a culture shift in which reaching the age 65 is no longer considered to be the end of a person's active life, according the Department of Social Affairs explained.

The new legislation also offers over-65s the option of receiving the AOW in part, so they may gradually retire rather than stop working altogether at a set date.

"This way, the AOW becomes an individual choice, based on people's physical and financial possibilities," according to a spokesman for the ministry.

Professor Lans Bovenberg of Netspar, the knowledge network for ageing and retirement, commented to IPE: "This is an interesting start, which could have the positive effect of encouraging employees to keep on working longer."

"However, in my opinion, the government should also gradually raise the official retirement age to 67 between 2016 and 2040. In order to keep the pay-as-you-go funded AOW affordable, such measure is inevitable in the long run," Bovenberg added.

The proposed legislation will be put to the Council of State (Raad van State) - the highest law court in the Netherlands - for advice, before parliament makes a final decision.

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