Pension build-up

The build-up consists of all pension claims on 31 December 2005 which entitle pensioners to an annual payment, on average per population group. It comprises the sum of pension claims and pension capital that has been built up by the participants in a pension fund. The amount is the gross built-up pension entitlement that a person would receive yearly (before tax), if he or she were currently 65 years of age and was to retire today. Future income from labour and other individual choices and circumstances are not taken into account. The statistics refer to the Dutch population aged between 15 and 65 years. The numbers per population group are also given. 

The average is calculated by dividing the sum of the pension build-up of a population group by the number of people in that group. Where applicable - in aid of uniform pension build-up statistics - surviving relatives’ pension and pension capital are converted and added to the pension from labour. This makes the statistics unaffected by the specific characteristics of the various pension schemes.

The built up pension is by no means equal to the future pension payments, because:

All relevant price indexations are taken into account up to the survey date. Future indexations are not taken into account. The built up pension is therefore expressed in terms of current purchasing power.

The build-up is based on the current marital status; i.e. for singles the surviving relatives’ pension they may have built up is included in the old age pension. Conversely, for married people with a pension scheme without explicit surviving relatives’ pension, the old age pension is reduced by a customary surviving relatives’ pension (70 percent). This corresponds with the choice that people often have to make when they reach retirement age.

Any future re-division of built-up pension claims as a result of marriage, divorce or other reasons is not taken into account. The figures are based on sample data from a number of large and medium-sized pension funds. The response comprises 69 percent of the total pension build-up at pension funds in the Netherlands. An estimate was made for the missing part. In the course of 2008 second-estimate and definite figures will become available on the basis of supplementary data from pension funds and insurance companies.

In addition to the labour component of pension, people may also be entitled to state old age pension (AOW), pension from individual pension schemes and payments from other capital which can be used as a provision for old age, such as endowment insurance and real estate.