NETHERLANDS - The Dutch parliament has endorsed the government's proposal to increase the retirement age for the state pension AOW to 66 in 2020 and subsequently to 67 in 2025.

Social affairs minister Henk Kamp again rejected a proposal - tabled by the liberal democrat party (D66) and the green party (GroenLinks) - to start increasing the AOW age incrementally next year.

"We must stick to the Pensions Agreement with employers and workers, to avoid new uncertainty and new negotiations, so we can implement the necessary measures as soon as possible," he said.

"If we opt for a premature review of the Pensions Agreement, the whole deal might collapse."

Parliament also decided to increase the flexibility of the AOW age, allowing workers to retire two years earlier against a benefits discount of 6.5% for each year or early retirement.

Low-earning workers who have been in employment for a long time will be eligible for a compensation, which will limit the discount to 1.5% for each year of early retirement.

On the other hand, employees can continue working for five years beyond the official retirement age and will receive a 6.5% increase of AOW benefits for each year.

Following the decision to increase the retirement age for the state pension, the rules for tax-facilitated pension saving for second and third-pillar pensions will be adjusted in 2014.

Parliament decided to link the official retirement age to longevity.