The pension trial balloon of the incoming cabinet
Publication date: 3 February 2026
If the plans outlined in the recent coalition agreement become reality, employees will have to work longer. The proposals include, once again linking the state pension age (AOW) directly to life expectancy, while at the same time allowing the fiscal room in the second pension pillar to shrink further. Is this a trial balloon that will eventually take a different shape?
1. Proposed pension measures (p. 44 of the 2026–2030 coalition agreement)
First of all, the intention is that the AOW retirement age will once again rise in direct proportion to life expectancy as from 2033. In addition, the coalition agreement rather cryptically states: “Finally, over the coming six years we will reduce the fiscal subsidisation of supplementary pensions for the highest incomes.” The budgetary table included in the agreement is more explicit, referring to a “six year freeze of the earnings cap.” In other words, the already frozen earnings cap (€137,800) will remain frozen for a longer period. This does not surprise me and was already anticipated in our earlier news article on this topic.
2. A trial balloon?
Two aspects of the pension proposals stand out. The plan to accelerate the increase in the AOW retirement age is politically sensitive, given that the 2019 Pension Agreement—concluded with trade unions and employers—explicitly introduced a slowdown, which was subsequently implemented. It is therefore hardly surprising that GroenLinks PvdA and the trade unions reacted negatively almost immediately.
Secondly, it is notable that the earnings cap for supplementary pensions is only being frozen, while calls for a substantial reduction of that cap are becoming increasingly frequent. I would not be surprised if the AOW measure were ultimately abandoned and the €137,800 earnings cap were significantly lowered instead; after all, the incoming cabinet must realise its budgetary savings somewhere.
3. Realism
That said, no one can deny that financing the AOW is becoming increasingly difficult. This is due to the ageing population (the ratio between working people and retirees) and the pay as you go system (whereby the working population finances current pensioners). Alternatives to a faster increase in the AOW retirement age include fiscalising the AOW, reducing the level of the AOW benefit, or introducing an income or asset threshold. All of these are unattractive measures for AOW recipients.
4. Appropriate employment conditions in a shrinking pension framework
Whether through the back door (lowering the earnings cap) or the front door (intervening in the AOW), the pension system will in all likelihood be further scaled back. This has been happening for decades. As a result, it is becoming increasingly important for social partners to provide tailored solutions and to make use of legally facilitated employment conditions relating to “deferred pay.” The following fiscal instruments are particularly relevant.
Leave saving
Employees can fiscally save up to 100 weeks of leave, which can be used for a (gradual) transition towards retirement. This provides flexibility and supports sustainable employability or early retirement in the context of a rising AOW age.
RVU threshold exemption
This fiscal exemption makes it possible to allow employees to exit the workforce up to 36 months before reaching the AOW age without triggering the punitive levy (57.7%), up to the amount of the exemption threshold. It is intended exclusively for situations involving physically or mentally demanding occupations and enables earlier retirement while preventing long term incapacity.
Additional pension saving up to the 30% fiscal limit
Under the Future Pensions Act, pension benefits can be accrued up to 30% of pensionable salary on a fiscally favourable basis. Many schemes still have, or are expected to develop, fiscal headroom that allows for additional saving out of gross salary. Employers may also make additional contributions. This helps employees increase their pension capital and potentially retire earlier.
Senior schemes / generational arrangements
From a tax perspective, it is permissible to work 50% while receiving up to 100% salary and continuing full pension accrual. The best known variant is the 80 90 100 model. This arrangement can stand alone but can also be effectively combined with a work to work transition programme.
