Dutch Pension System (3-pijler model)

The Dutch pension system is a three-pillar model (3-pijler) the OECD often cites as a benchmark. Pillar 1 is the AOW state pension every resident builds up; Pillar 2 is the occupational pension (bedrijfspensioen) that most employees are auto-enrolled in; Pillar 3 is private retirement savings (e.g. lijfrente or other tax-advantaged products). Together they are designed to replace roughly 70–80% of pre-retirement income.

Pillar 1: AOW (state pension)

• AOW (Algemene Ouderdomswet) is the state basic pension paid by SVB (Social Insurance Bank).
• The state pension age (AOW-leeftijd) has been rising in steps and stands at 67 as of 2024, with further increases linked to life expectancy.
• AOW is residence-based: entitlement is calculated not by contributions but by the number of years you lived in the Netherlands between age 15 and the AOW age. Fifty years of residence = 100% (full AOW); each year of residence adds about 2%.
• As of 2024, the full AOW is roughly €1,460/month for a single person and around €990/month per spouse for couples, indexed annually.

Pillar 2: Bedrijfspensioen (occupational pension)

• Most employees are auto-enrolled through sector- or company-level collective agreements (CAO), with overall coverage around 90%.
• Funded jointly by employer and employee contributions and managed by pension funds (pensioenfondsen) — large funds include ABP, PFZW, and PMT.
• Under the new pension law (Wet toekomst pensioenen, Wtp) passed in 2023, all occupational schemes will move from defined-benefit (DB) to a system closer to defined-contribution (DC) by 2027. Each member's accrual will look more like a personal account, with more direct exposure to market returns.

Pillar 3: Private savings (Lijfrente)

• Used by self-employed people and employees who want to top up. Within an annual cap (jaarruimte), contributions are deductible from box 1 income, providing meaningful tax relief.

What Koreans often miss

• AOW is residence-based, not contribution-based. A short stay followed by return to Korea makes a full pension unlikely. However, the Korea–Netherlands social security agreement generally allows you to combine Korean National Pension contribution periods to meet minimum-period requirements (verify with both SVB and Korea's National Pension Service).
• Workers using the 30% ruling have a lower taxable income, but this does not affect AOW. The base used for occupational pension accrual differs by employer and fund, so confirm at the time of enrolment.
• Lump-sum refunds on departure are generally not available. Accruals are typically paid out as a pension at retirement age and remitted to Korea or your country of residence.

Official guidance: SVB: AOW, Pensioenfederatie, government.nl: Pensions