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Pensioners work longer for incentives - APG

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  • Pensioners work longer for incentives - APG

NETHERLANDS - APG Group has presented evidence suggesting pension fund members will work for almost 18 months more than they originally planned before retiring, if they are given financial incentives to do so.

Nationwide reforms were introduced in 2006 which APG officials say have been proven to have worked, as workers from pension funds they manage are retiring later and subsequently receiving a higher pension payout.

Rachied El Hasnaoui, analyst at APG, and Giel Jonker, consultant at partner company Cordare, say APG's research indicates working for an extra year beyond an individual's planned retirement age longer can increase the value of a pension by as much as 10%.

Prior to the rule change in 2005, older workers could choose between taking early retirement through a so-called VUT scheme - vervroegde uittredingsregelin - or an improved salary for retiring later.

To encourage people to work longer, the APG Group's pension fund participaants agreed in 2006 to reserve the VUT benefits if people kept on working, but pay them a higher benefit at a later date as a result.

The pension funds also introduced a flexible retirement age, which allowed workers to choose the moment they want to stop working.

Jonker and El Hasnaoui noted older workers are now looking beyond their birthdays as the moment at which they choose to retire, though employees still take their scheme's agreed retirement age - the benchmark at which certain benefits are guaranteed - into consideration when making their retirement decisions.

Although working until the age of 70 is possible, figures from APG Group suggested there is now a spike of retirements at the official retirement age of 65, though "the number of people working longer than 65 is minimal", said El Hasnoui.

That said, the study has so far provided insufficient clues as to possible future trends concerning a longer working life and financial incentives, the APG analyst told IPE.

APG Group is a subsidiary company of the large civil service scheme ABP, and now serves approximately four million participants in the civil service, education, building industry, housing corporations and energy sectors. APG Group has €200bn in assets under management.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email

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