Pension entitlement often only partial

Nearly one in seven of the Dutch population have built up only partial entitlement to a state old age pension. This means that when they reach the age of 65 they will not be entitled to the full amount of state pension. First generation non-western foreigners in particular are more likely to have a partial entitlement.

Partial pension entitlement

The state old age pension is a national insurance for which entitlement is built up between 15 and 65 years of age. Some people, however, do not build upentitlement to this pension, for example if  they live abroad or erroneously do not pay premiums for this pension. Someone who lives abroad for half of the build-period for state pension is entitled to only half the amount of the state pension at the age of 65 years.

More people will receive partial pension

An increasing number of people will receive a partial state pension in the coming decades. Thirteen percent of the Dutch population aged between 15 and 65 years had not built up a maximum pension entitlement at the end of 2004; 7 percent of over-65s receiving a state pension in the fourth quarter of 2004 were not entitled to the full amount.

Low build-up for young adults

The average pension build-up is lowest around 30 years of age. Young women build up relatively small amounts compared with young men. Over the age of 35 the average build-up is slightly lower for men than for women.

Average pension build-up, end of 2004

Immigrants build up less

The relatively large percentage of immigrants in the younger age groups accounts for a large part of the lower entitlement built up by young adults.First generation foreigners were not able to build up any pension entitlement while still living abroad. They run the risk of receiving a pension below the level of income support when they reach the age of 65 years. Most native Dutch people and second-generation foreigners do have a full entitlement to  state pension.

Average pension build-up by ethnic origin, end of 2004

Incomplete entitlement among non-western foreigners

People with an Antillean or Aruban background in particular, with an average entitlement of less than 70 percent, have strongly reduced pension entitlements. To a slightly lesser extent this is true of people of Moroccan or Turkish origin as well.

The average entitlement of other non-western foreigners are lowest. To an important extent these are immigrants from countries such as Iraq, China, Afghanistan, Iran and Somalia, who arrived in the Netherlands at older ages.

Average pension build-up of non-western foreigners, end of 2004

Luc Verschuren