People who decide to work less take little or no account of the impact this has on their pension accrual. 69 percent of Dutch people who have recently started working less have not investigated the consequences for their pension: they mainly look at whether they can still make ends meet if they work fewer days. This is evident from one research published on Tuesday at the initiative of the Ministry of Finance, carried out by I&O Research. To this end, the agency surveyed a representative sample of more than 1,500 people.
Lisa Brüggen, professor of financial services at Maastricht University, finds it worrying that the pension is often not included in the decision to work less, she writes in the report. “Suppose that, as a construction worker, you decide at the age of 32 to work one day less per week, this means that you will accrue approximately 27,000 euros less pension. In concrete terms, this means that you have approximately 120 euros net per month (10 percent of the supplementary pension) less to spend upon retirement. At that moment, this can be the difference between being able to make ends meet and not.”
Part-time working is popular in the Netherlands: almost half of the working population (45 percent) works less than 36 hours per week. Because women in particular work part-time — 67 percent, compared to 28 percent of men — they are extra vulnerable, says Brüggen. According to her, research shows that many women are not financially independent and that they do not know what their financial and pension situation looks like. “That does worry me. Because this means they build up much less pension than men. In the European Union, the Netherlands has the largest pension gap between men and women after Cyprus, more than 40 percent.”
‘We’ll figure it out’
The research shows that partners are not well informed about each other’s pensions. The majority know what their partner earns, but only 45 percent of Dutch people also know how much pension their partner has accrued. Young people are much less likely to know this about each other than people over 55 years old.
In an official partnership (a marriage or a registered partnership), partners are automatically registered with each other’s pension fund, but partners without such an official connection rarely appear to have arranged anything for when they separate. 93 percent of respondents without an official partnership have not made any agreements about finances and pensions when the relationship ends. A third of this group indicates that they would like to arrange this if they have time.
The group has little concern about this: 75 percent of partners without an official partnership expect that they will be able to work things out in the event of a relationship breakdown. That is optimistic, the researchers write: “Many pension disputes concern the division of the pension between divorcing partners.”