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After 15 years, MPs finally vote to reform corporate pension system

financial times

MPs have voted by a large majority in favour of legislation to reform the corporate pension system, 15 years after change was first mooted. Last week, the Labour party and GroenLinks withdrew some of their objections to government plans, meaning there is now majority support for the changes in the senate.

If the new system comes into full operation in 2027 as planned, workers with a company pension scheme will no longer know in advance how much pension they get.

Instead, pensions will vary in line with investment returns and life expectancy, meaning the economy will have more of an influence on payouts. The aim of the reform, the government says, is to spread the burden of paying for pensions more fairly across the generations.

Corporate pensions will no longer be on based average (wage related) contributions but on everyone paying the same. The government hopes to have the new legislation up and running by July 2023 with a transition period until 2027.

The senate will debate the plans in January. The Dutch pension system is currently based on three pillars – the state pension AOW, compulsory corporate pension schemes – either sector-wide or company based – and individual or private pension schemes.

Source: Dutch News