NETHERLANDS - A large portion of Dutch employees have been able to speed up the build-up of their pension in the past five years, according to pensions regulator De Nederlandsche Bank.
The percentage of employees who are building up more than 1.75% of their pension each year has increased from approximately 20% to 92% since 2002, DNB said.
Traditionally workers would receive a pension equal to 70% of their salary at the official retirement age of 65 if they accrue 1.75% a year over 40 years,.
The DNB attributes the increase in the pension build-up to the transition from final to average salary schemes in 2003/2004, and to the introduction of the VPL Act which was meant to discourage early retirement.
The VPL Act ceased tax benefits for early retirement via the VUT scheme and prepensioen. In replacement it introduced the ‘levensloop' or life course scheme, which allows individuals to save on a tax advantaged basis for early retirement but also for sabbaticals.
According to DNB, pension funds have responded to both changes by introducing compensating measures, for example by reducing the portion of the salary over which no pension is built up and over which participants do not pay contributions.
In addition, many schemes have raised the accrual rate of their pension schemes, DNB said.