The state or AOW pension (basispensioen) is paid from the age of 65 and provides basic benefit payments of up to 70 percent of the minimum net wage. Under the General Old Age Act or Algemene Ouderdomswet (AOW), which came into effect in 1957, all people who have lived or worked in the Netherlands between the ages of 15 and 65 are entitled to receive the state pension.
The amount of state pension you receive depends on the pension rights you have built up during your working life in the Netherlands. Each year that a person pays (health) insurance in the Netherlands they accrue two percent of the state pension benefit. People who do not work will also accrue the state pension rights.
The state or AOW pension is provided by the Sociale Verzekeringsbank (SVB) which manages and implements the Dutch national insurance scheme.
Collective pension funds
The second source of Dutch pension benefits are collective pension schemes connected to a specific industry or company. Such collective or private schemes are managed by pension funds (pensioenfonds) or insurance companies.
Individual pension products
The third part of the Dutch pension system is individual pension products or supplements. Such supplements are mostly used by self-employed and employees in industries with no collective pension funds. In this way individuals can independently buy and manage pension products or investments such as life insurance, shares or property, and take advantage of related tax breaks.