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AOW benefit: domestic situation The AOW benefit is a fiat-rate one based on the net statutory minimum wage.

The amount of the benefit does not depend on any former income or on contributions paid in the past.

The joint capital of all pension providers is much higher, namely approximately EUR 1,075 billion.

More than 8.5 million people receive a pension benefit or have acquired vested pension rights.

Those people can opt to supplement their AOW benefit by arranging individual pension provisions, such as life insurances, a fiscal old age reserve for entrepreneurs, and endowments.

Although there is no statutory obligation for employers to offer a pension scheme to their employees, more than 95% of employees are covered.

It is possible that people do not receive a supplementary pension from their employer because there is no obligation for employers to make pension commitments to their employees.

Alternatively, it may be because people have not been engaged in paid labour or were self-employed.

The third pillar includes the personal annuities offered by insurance providers, supplementary to the AOW and/or the occupational pensions.

Various types of pension provisions In the Netherlands there is a mixed system of public and private provisions.

Public means that the provisions are regulated by law, private means that the provisions are regulated by the employer or that people, individually, make pension arrangements with an insurance provider by buying an annuity insurance or endowment insurance.

The employer usually pays more than fifty percent of the pension contributions.

This system of supplementary pension schemes has a rich history and is the backbone of the old age pension system in the Netherlands.

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