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The Dutch pension system First pension pillar

The Dutch pension system First pension pillar. Felix Suwandy Budapest, July 5th 2007. Dutch pension system. Characteristics of the AOW. History To provide accustomed living standard Pay-as-you-go system Intergenerational solidarity Individual right (for residents)

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The Dutch pension system First pension pillar

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  1. The Dutch pension systemFirst pension pillar Felix Suwandy Budapest, July 5th 2007

  2. Dutch pension system

  3. Characteristics of the AOW • History • To provide accustomed living standard • Pay-as-you-go system • Intergenerational solidarity • Individual right (for residents) • Possible proportionality of 2% each year • AOW saving fund

  4. Conditions • Settlement in The Netherlands • Between 15 – 64 years old • Missing years (2% each) • Foreign employees in Dutch employment (If contributions are paid) • Dutch employees in foreign employment (Pay voluntary AOW contribution, 10y)

  5. Level of the AOW • Linked to Dutch statutory minimum wage • Non-income related • Solitary person 70% = € 11,831 • Married/cohabitant person 50% = € 8,097 each => € 16,194 couple • Supplementary pension (non-pensioner partner)

  6. Financing the AOW • Contributions • Employees younger than 65y old only • Flat level of 17,9% • Related to actual income • Taxable yearly income maximized at € 30,357 (€ 5433,90)

  7. Demographic ageingissues • Advance workforce participation • Promote day care centers/nurseries • Increase retirement age • Promote employment for the elderly • Redeem national debt • Wage restraint EU: Positive review => Highly maintainable

  8. The end Questions?

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