The minister writes this in a letter about the current state of affairs regarding the exploration of additional purchasing power instruments. The minister wants to further investigate the various options to gain a better understanding of the pros and cons associated with them.

Minister Eddy van Hijum: “Pension is about security for the future. You want to enjoy a carefree old age. In the old system, pensions were not raised for many years – and sometimes even reduced – while prices continued to rise. Many elderly people are rightly angry about this. In the new system, pensions can be more easily increased. Older people are already noticing this effect. The variants examined have the potential to improve purchasing power. But it must be a solution that works for everyone, young and old.”

Pensions that can keep pace with price developments is an important objective of the new pension system. After many years in which pensions did not increase, unions, employers, and the cabinet reached the Pension Agreement in 2019. A part of the new system is that the achieved returns can be used earlier to increase pensions. Calculations show that pension benefits can therefore increase faster. Additionally, it becomes clearer how much premium each participant and their employer set aside for their pension, and the risks are shared fairly between young and old, reducing disputes between generations.

The minister has looked at five different variants. In good years, assets can be set aside within the group of pensioners, from which pensions can be increased if inflation is unexpectedly high. There can also be a choice for a somewhat lower pension at the start of retirement, so there is a greater chance that the benefit can keep up with rising prices in the following years. These two variants do not lead to shifts from young to old.

In another variant, a retired participant can be protected against higher than expected inflation. For this real protection return, a market-conform price must be paid to the other participants in the fund. The solidarity or risk-sharing reserve could also be used to absorb realized inflation shocks. Currently, this can only be used to absorb higher than expected inflation shocks. In both of these variants, it must be carefully considered how the pros and cons are distributed between younger and older participants and whether this can be done fairly.

In the fifth variant, more investment risk is taken with the pension assets of the elderly. In good years, this fills the solidarity reserve, and in years when times are tough, the reserve is used to help pensions keep up with inflation. The minister warns that with this variant, people may take on more risk than they can and want to bear, and that a greater financial risk falls on the younger generation.

In the autumn of 2025, De Nederlandsche Bank (DNB) will calculate various variants. The minister wants to use these calculations to weigh the pros and cons further. In anticipation of this further analysis, the minister will discuss the exploration of additional purchasing power instruments with the Chamber.