1. WORKSHOP 2B Basic State Pension AOW Institutional tool
Maria van Boxtel, Land & Co

2. AOW (Algemene Ouderdoms Wet)
What is it ?
Basic state pension for everyone in the Netherlands
OBLIGATORY PARTICIPATION FOR ALL
2% build up for every year of your life you LIVE in NL
Target group: old people
By whom? Dutch state: national level
Part of ‘peoples insurance’ (volksverzekeringen) for kids, old age, widowers/s, care

3. Why ? To prevent old age poverty Willem Drees, prime minister
Emergency legislation 24 may 1948 and real legislation 1957
upping qualifying age 65 to 67 and more

4. You pay a premium if you work:
How does it work?
You pay a premium if you work:
1. Your employer deducts from your salary
2. The state deducts from your welfare payment
3. An entrepeneur pays a % of turnover in income tax
To a maximum of 18% of a turnover of Euro: – max
You get a pension if you are over 65 (or 67):
Single household gets 760 euro (915 is minimum income)
2 person household gets 1115 euro (1300 is minimum income)
So you get a minimum income at old age

5. Employee and Entrepeneur:
Added pension
Employee:
1. Your employer is part of a pension fund and deducts from your salary
Employee and Entrepeneur:
2. Selling your ‘capital’ at retirement age (farmers!)
3. A banksaving: savings product for pension
4. A life annuity: insurance product for pension
Cost reduction, like paying off your house etc.

6. The AOW is: Very succesfull, ‘best pension system in the world’
Relatively expensive 32,7 billion EURO for 3,2 million old people on 16,8 million citizens
Gives pension to everyone, even the ones that do not work in an official job (housewifes, sick people etc)
Not to sell your (farm) business at maximum price….