AOW

AOW stands for Algemene Ouderdomswet, the Dutch state pension system. It provides a basic public pension to residents of the Netherlands when they reach the AOW age, helping to provide a retirement income in combination with other pensions or savings. The system is designed as a flat-rate, universal provision rather than an income- or asset-tested benefit.

Eligibility and accrual: The AOW age is determined by the person’s birth year and has been rising over time. Eligibility is linked to residence in the Netherlands between the ages of 15 and 65. For each year of residence in that period, a person earns a share of the full AOW; a maximum of 50 years yields the full basic pension. Fewer years of NL residence result in a pro-rated AOW amount. Living or working abroad can affect the amount, depending on the length of residence in the Netherlands.

Administration and financing: The AOW is administered by the Sociale Verzekeringsbank (SVB), a government agency. It is financed on a pay-as-you-go basis through contributions from workers, employers, and government funding. The state pension is designed to provide a baseline level of income and to be supplemented by other pensions and private savings.

Pension amount and other income: The AOW is a basic pension and is generally complemented by occupational pensions, personal savings, and other income. There are also partner and survivor provisions that can affect the total retirement income for couples, depending on circumstances and eligibility.

International and reforms: The AOW framework has evolved with demographic and economic changes and may change in the future. Individuals who have lived or worked outside the Netherlands should check how residence history affects their AOW with the SVB, and consult official guidance for current rules.