How do you accrue a pension?

A.  General Old Age Pensions Act (AOW)

AOW is the state pension. You build this up in about 50 years if you live or work in the Netherlands during these years. The age at which you will receive state pension depends on your date of birth. The amount of the state pension will not be the same for everybody either. The government adjusts the amounts to the minimum wages every year. For your state pension age check svb.nl. There you will also find the amounts and more information on the state pension.

B. Pension that you accrue through you work

You are accruing this through your employer. Once a year, you will receive a Uniform Pension Overview (UPO). In this pension overview you will see your accrued pension.

  • upon retirement.
  • when you become incapacitated for work.

In this pension overview you can also see your projected pension:

  • for your partner in the event of your death.
  • for any children in the event of your death.

Also check mijnpensioenoverzicht.nl (only available in Dutch). There you will find an overview of your state pension and all your pensions that you have accrued through work. There you will also find the net amounts.

C. Pension that you have arranged yourself

You may supplement your state and other pension yourself, for example by savings or by saving in a blocked account with your own situation and wishes. A financial adviser can help you make choices. Or check www.nibud.nl for the Pensioenschijf- van-vijf calculation tool (only available in Dutch).

You accrue pension under an average salary pay plan

Every year, you accrue a portion of your pension. Your total pension is the sum of all those years. This is called an average salary plan. We will add your increases, which you will receive every year, but only if our financial situation allows it. You will receive your pension when you reach the age of 68 for as long as you live.

Your accrual rate is 1.875%

Every year you accrue a part of your pension over the pensionable base. The accrual percentage is 1.875 of the pensionable base. The pensionable base is your pensionable salary minus the offset (the part of your salary over which you do not accrue pension). The offset is set at € 13,897 (1st July 2019). This is because you will also receive old-age pension from the government. You accrue pension with us over your gross salary up to € 107,593,- (in 2019) on a full-time basis. This is the legally stipulated maximum salary over which pension may be accrued. Do you work part-time? Then your salary will be lower than if you work full-time. So you will accrue less pension. You will also pay less contribution.

An example
Your gross salary amounts to € 23,897 per year. The offset amounts to € 13,897. So you accrue pension over the amount of € 10,000. You accrue 1.875% old-age pension on that pension base. This is € 187,50 in that year. The old-age pension that you will receive upon your retirement is the sum of all years worked.

You and your employer pay for your pension together

Every month a contribution will be deducted from your salary for your pension. In 2019, the total is 31.5% of your pension base. Your share of the contribution will be one third. Your employer will pay two thirds. Your pay slip states the exact amounts.