The government, employers, and employees have reached agreements about changes to the pension system. These agreements are set out in the Pension Agreement.
The changes will affect nearly everyone.
Together with SPF, social partners at SABIC will have an in-depth look at the Pension Agreement in the period ahead. It is not yet possible to say exactly what it will mean for all SPF members.
The state pension age will increase more gradually
The state pension age is fixed until 2026:
After 2025, the state pension age will continue to increase but at a slower pace than currently applies. The legislative proposal concerning the increase in the state pension age as from 2025 has not yet been adopted.
Pension accrual with SPF
Pension accrual with SPF will change. The contribution paid by your employer SABIC is the same for each employee, regardless of the employees’ ages. That means that your employer pays too much for younger employees and too little for older employees. A portion of the contribution paid for younger employees goes toward the pension of the older employees. That system (average contribution system) worked well for a long time, but is now due for reform. This will therefore change. What exactly this means remains to be seen.
...what will happen to the pension that I have already accrued with SPF?
The social partners must first make a decision about this, too. In order to extend the Pension Agreement to pensioners and those who have already been accruing pension for quite some time, the accrued pensions must be transferred to a new pension contract. As that can't yet be done automatically, it has been agreed in the Pension Agreement that the government will make this legally possible.
...how quickly will all of this happen?
The intention is for the new system to take effect in 2022, but as not all pension funds are willing or able to make the switch at the same time, there will be a transitional arrangement. It is not yet certain how long that will last, but all pension funds will have to have made the switch by 2026. The current pension contract between SABIC and SPF will remain in effect through 2023. As it is crucial to ensure that everyone has enough time to complete the process, social partners of SABIC and SPF will decide jointly what the best moment is to make the switch.
…what will happen up until then?
The Pension Agreement will be further elaborated and the legislation and regulations will be adapted to it. The aim is for this to be finished before January 1, 2022. Then social partners and SPF will have to start deciding which choices must be made in order to arrive at a new scheme that is appropriate for all SPF members. A start has been made, but we are far from finished.
…and the pension cuts?
You have probably read or heard about this. By law, all pension funds must cut back pensions if the funding level is below 90% as of December 31, 2020. At SPF, the "critical" funding level is about 92%. On May 31, SPF's funding level was approximately 95%. If the economic situation deteriorates further during the rest of the year, there is still a risk of cutbacks. But ultimately, this will be determined by the situation on December 31.