The Dutch government has announced that the current uniform cross-generational pension accrual system must be replaced with ‘degressive’ accrual – where younger employees accrue proportionately more pension rights than older workers – by 2020.
In a long-awaited update on the government’s plans for a new, sustainable pensions system, Jetta Klijnsma, state secretary for social affairs, said participants would be compensated if they missed out on rights accrual during the transition.
The Cabinet previously indicated that it wanted an alternative that would be fair for all generations and maintain support for younger workers in a collective pensions system.
Under the current average premium – a fixed percentage of salary – younger workers pay proportionally more, as their contribution is to generate a bigger return over time.
