• Areas of Expertise:
  • Business and society
  • Diversity
  • Employment status
  • Gender
  • Health
  • Human capital
  • Industrial change
  • Industrial relations
  • Labour market
  • Participation at work
  • Population and society
  • Quality of life
  • Quality of work
  • Social cohesion
  • Social protection
  • Time
  • Work-life balance
  • Work organisation

STATE OLD-AGE PENSION

Benefit received under the General Old-Age Pensions Act (Algemene Ouderdomswet, or AOW) on attaining the age of 65. The Act provides a basic pension equal to the statutory guaranteed minimum income and applies in principle to all those resident in the Netherlands. It is funded via the tax system, i.e. the working portion of the population provides the resources, through contributions, from which pensions are paid. There is no relation between contributions paid and the amount of the benefit. The full pension is, however, reduced by 2 per cent. for each year that the insured person has not paid contributions.

In addition to the basic state pension, various industries and companies operate occupational pension schemes of their own for employees alone (see supplementary pension schemes ). The intention is that the state pension and the various supplementary schemes should together provide the retired individual with 70 per cent. of their last-earned income. However, not all employees receive a supplementary pension: in 1985 some 18 per cent. received only the basic state pension. In the same year the total proportion of women receiving a pension was 34 per cent. as against 83 per cent. of men; on average, married men received the highest pensions and married women the lowest.

Since 1985, as a result of EC Directive 79/7 on equal treatment for men and women in matters of social security, the basic state pension has also applied to married women and they pay contributions in their own right. All couples have also been treated equally whether married or living together. In 1990 two million people received a basic state pension. This number is expected to rise steeply as a result of the ageing of the population, with contributions possibly even needing to double as a result.