NETHERLANDS - The Dutch government will increase the retirement age, provide more flexibility around retirement and suspend contribution holidays in a new deal with employer and employee unions.
The sweeping reforms will increase the pension age from 65 today to 66 in 2020 and 67 in 2025. Meanwhile, there will be more flexibility around when to retire with individuals being allowed to continue working past 65, with every year they continue to work resulting in an increase in pension of 6.5%.
Other changes to the state pension include an increase in payment of 0.6% per year for those who are already retired.
Prime Minister Mark Rutte (pictured) said this is "something unique in the Netherlands that agreement has been reached for hundreds of billions of euros and perhaps the biggest change to the pension system since World War II," reported Radio Netherlands Worldwide.
Companies themselves will face changes as contribution holidays will be eliminated. The move is meant to smooth out pensions for the individuals. The premiums paid by employers and employees will remain constant every year, regardless of whether or not investment returns are strong or weak.
Gert Kloosterboer, spokesman at the Dutch Association of Industry-Wide Pension Funds (VB) said: "We're rather pleased this agreement is here. I think it can help the system be more sustainable in the future. We think what's on the table offers solutions for people living longer and solutions for the shocks of the financial markets."
The British Medical Association (BMA) has warned chancellor Philip Hammond to reform the NHS pension scheme rules or doctors will reduce their working hours.
The lifetime allowance should be scrapped and replaced with a lower annual allowance, last week's Pensions Buzz respondents said.
Action for Children Pension Fund has outsourced its pensions administration to Trafalgar House.