Actuarial retirement age at NN CDC Pensioenfonds will continue to be 67

On 1 January 2018, the retirement age for Dutch state pension (AOW) has risen to 66. With effect from that date, the required actuarial retirement age for tax purposes has risen from 67 to 68. These changes follow from legislation that applies to all pension funds. NN Group and the trade unions have agreed not to raise the actuarial retirement age in 2018. As a result, the pension accrual rate needs to be lowered from 1.875% to 1.738%. What does this mean for your pension?

With the ageing of the Dutch population, pensions need to be paid out over a longer stretch of years. To address this situation, the AOW retirement age and the actuarial retirement age are being raised.

AOW retirement age is gradually being raised
The Dutch government has decided to gradually raise the retirement age for Dutch state pension (AOW) to 66 by 2018 and 67 by the year 2021. Starting in 2022, the AOW retirement age will be linked to life expectancy figures for the Netherlands. By that year, the AOW retirement age will have increased to 67 years and three months. Any subsequent rise in the AOW retirement age will be announced by the Dutch government five years in advance. Click here to calculate your AOW retirement age.

Actuarial retirement age to rise gradually
The actuarial retirement age is also set to rise gradually. This refers to the age that is used to determine the maximum amount of tax-deductible pension a person is allowed to build up under Dutch tax law. The actuarial retirement age is not equal to the AOW retirement age, although its rise is related to the rise of the AOW retirement age.

The actuarial retirement age was already 67. The Dutch government recently decided to further raise it from 67 to 68 with effect from 1 January 2018. This means you should bear in mind that, starting in 2018, you will be building up pension until you turn 68. This will in turn have an impact on the calculation of the pension contribution and the rate at which your pension accrues every year. Given that your pension plan’s actuarial retirement age is currently 67, it should be adjusted upward to 68. It could also be left at 67, but that would mean your annual pension accrual would be lower.

Social partners to decide
The social partners - NN Group and the trade unions CNV Vakmensen, FNV Finance en De Unie – must agree whether or not to raise your pension plan’s actuarial retirement age. End of 2017, the social partners decided not to raise the actuarial retirement age for employees of NN Group, leaving it at 67 instead. This implies that the pension accrual rate needs to be lowered from 1.875% to 1.738%.

NN CDC Pensioenfonds’ role
The social partners are the ones who make decisions regarding the pension agreement. The pension fund is then asked to assess whether it will be able to execute, fund and communicate the change in question. In this case, the answer was affirmative. As a result, the actuarial retirement age will continue to be 67 with effect from 1 January 2018, while at the same time the annual pension accrual rate will be lowered to 1.738%.

What this means for your pension
Below is a list of the implications for your pension:

• If you were you born after 1954, the rising AOW retirement age will have implications for you. Click here to calculate your AOW retirement age.
• In 2018, NN CDC Pensioenfond’s pension accrual rate will be 1.738%.
• Would you like to align your AOW retirement date with your pension fund retirement date? Go to the Pension Planner to find out what your options are.

What will remain the same
Below is a list of things that are not set to change:

• The pension fund's standard retirement age will remain 67. You may choose to retire before you reach the age of 67, but you cannot choose to retire after that age.
• You may opt for early retirement starting at the age of 60. It is important for you to realise that your pension benefits will be lower if you opt for this. After all, you will have fewer years to accrue pension, your pension accrual will need to be paid out over a longer stretch of time, and you will not yet be receiving Dutch state pension (AOW). Moreover, you will accrue less partner pension.
• If you were already employed by NN Group before 1 January 2014, you also have a pension accrual in Pensioenfonds ING. That part of your pension starts paying out from the day you turn 65 or 62, depending on which plan you were participating in. The current changes have no implications for your pension or actuarial retirement age in Pensioenfonds ING.

Questions
NN CDC Pensioenfonds keeps you informed by way of newsletters, specials, quarterly reports and website updates. If you still have any unanswered questions, feel free to contact us or check here the frequently asked questions.