Record increase in pension premiums this year

This year pension funds are increasing their premiums more than ever before, with increases of 10 percent being no exception. At many funds, employees are also accruing less pension, according to the annual survey by Financieele Dagblad and Pension Pro.

39 of the 44 industry-wide pension funds are increasing their premiums and/or cutting their pension accrual, according to FD. This affects about 5 million Dutch workers. The pension funds blame the increased premiums and lower accrual on low interest rates and lower expected returns.

Pension advisers called this year's increases unique. "We have never seen this before," Jeroen Koopmans of pension advisor LCP said to the newspaper. Most funds now charge a premium of 25 to 30 percent, which means that Dutch employees work more than 1.5 days a week for their retirement. Five years ago, pension premiums were still around 20 percent.

Last year outgoing Minister Wouter Koolmees of Social Affairs and Employment asked the pension funds to limit pension increases this year, given that many Netherlands residents are struggling under the coronavirus pandemic.

The pension funds told FD that, due to the current legislation, they had no choice but to increase premiums.