Expats in the Netherlands access worlds’ best pension scheme

Expats in the Netherlands access worlds’ best pension scheme

Expats in the Netherlands access worlds’ best pension scheme

If you’ve decided the Netherlands is your forever home and have a permanent job, the Dutch pension system will ensure your comfortable retirement.

The Dutch pension system is recognised as one of the two best on the planet, due to the diversity of its sources of funding, its strong regulation and its accuracy in calculating contributions and costs to ensure fair distribution. Basically, it brings together a pay-as-you-go system with an investment system in which individuals and collectives make low-and high-level investments aimed at supplementing their state pension income at retirement. The three models are the three pillars of the Dutch pension scheme.

In further clarification, the state pension itself is paid from 65 years old, calculated at 70 per cent of the legal minimum wage. Everyone who’s worked within the system between the ages of 15 and 65 is entitled to this. The amount received will depend on contributions during your working life, with those who don’t work also accruing pension rights. Retirees’ receipts must be supplemented by payments from collective or private pension schemes set up by employers and managed via insurance companies or pension funds. Companies pay monthly contributions to such funds and accrued capital is invested, with employees able to choose the type of scheme they prefer.

Three types of pension funds are available, with the first applying to those working in entire sectors such as retail, catering, the civil service or the construction industry. Medical specialists have independent, professional pension funds and corporate pension funds are used by single companies. In most industries, pension funds are mandatory. The third sector of Dutch pension funding is comprised of individual pension supplements or pension products, used mostly by the self-employed and those in industries where no pension scheme exists.

For expats, it’s possible to receive a Dutch pension if retiring in another country, with the amount dependent on the date of leaving the country and the time spent living in the Netherlands. It’s also possible to receive the basic state pension, dependent on your destination country. If you’ve left the country before your official retirement date, you will receive a reduced pension, but can choose to take out voluntary insurance up to 12 months after your leaving date. Those intending to move on before they officially retire are urged to keep track of their Dutch pension scheme.

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