NETHERLANDS - After months of negotiations and labour protests a new agreement has been reached between the government employers and Dutch trade unions.

Now civil servants will be able take pensions at 62, but will have to work in general three months longer.

The new agreement follows government plans to remove fiscal incentives of VUT and pre-pension.

These measures have been implemented to entice employees to work longer.

According to Jan Veringa, negotiator of the government employers (government, provincial and city councils, teachers), around 1m civil servants will now have the choice to work longer, to take a part-time pension or even pre-pension. But this will be at the cost of a lower pension payment.

Officially, the pension age will be 65, but will include the above mentioned options. If a civil servant wants to work longer, he will in the end receive a higher pension.

Government officials expect that this will in general entice civil servants to work longer.

Trade union negotiator Xander den Uyl stated that the unions are happy with the results. He reiterated that civil servants would still be able to take a pre-pension. Overall agreements will have a cost-neutral effect.

According to both parties, overall pension premiums will stay level, which is 7.3% of the total year salary. In addition to the pre-pension agreements, a levensloop arrangement is also included.

A civil servant will be able to save 0.8% of his total salary every year for this arrangement. In general this means that he can take his pension six months earlier or a longer period in a part-time pension.