The dutch pension system first pension pillar
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The Dutch pension system First pension pillar. Felix Suwandy Budapest, July 5th 2007. Dutch pension system. Characteristics of the AOW. History To provide accustomed living standard Pay-as-you-go system Intergenerational solidarity Individual right (for residents)

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The dutch pension system first pension pillar

The Dutch pension systemFirst pension pillar

Felix Suwandy

Budapest, July 5th 2007



Characteristics of the aow
Characteristics of the AOW

  • History

  • To provide accustomed living standard

  • Pay-as-you-go system

  • Intergenerational solidarity

  • Individual right (for residents)

  • Possible proportionality of 2% each year

  • AOW saving fund


Conditions
Conditions

  • Settlement in The Netherlands

  • Between 15 – 64 years old

    • Missing years (2% each)

  • Foreign employees in Dutch employment

    (If contributions are paid)

  • Dutch employees in foreign employment

    (Pay voluntary AOW contribution, 10y)


Level of the aow
Level of the AOW

  • Linked to Dutch statutory minimum wage

  • Non-income related

  • Solitary person

    70% = € 11,831

  • Married/cohabitant person

    50% = € 8,097 each => € 16,194 couple

  • Supplementary pension (non-pensioner partner)


Financing the aow
Financing the AOW

  • Contributions

  • Employees younger than 65y old only

  • Flat level of 17,9%

  • Related to actual income

  • Taxable yearly income maximized at € 30,357 (€ 5433,90)


Demographic ageing issues
Demographic ageingissues

  • Advance workforce participation

    • Promote day care centers/nurseries

    • Increase retirement age

    • Promote employment for the elderly

  • Redeem national debt

  • Wage restraint

    EU: Positive review => Highly maintainable


The end
The end

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