The AOW is socialism for the rich—intervention is urgently needed

Raising the retirement age appears to be the biggest sticking point for the incoming cabinet. There is significant opposition. However, maintaining the status quo is particularly appealing to the ever-growing group of affluent people. People with physically demanding jobs or poor health are the ones who pay the price. Meanwhile, the costs of the state pension continue to rise. Action is therefore necessary.

In this article, you will read:

• How problematic are AOW expenditures?
• How has the increase in the retirement age progressed so far?
• Is it even practically possible to help people in physically demanding jobs?

Jesse Klaver was rather ruthlessly shut out of coalition talks by D66, the VVD, and the CDA. But this week, the GroenLinks-PvdA parliamentary group leader took the initiative back into his own hands. While the other opposition leader, Geert Wilders, took a scattergun approach—arguing that everything Jetten wanted to do was, of course, bad—Klaver took aim at the accelerated increase in the state pension age. It proved effective and helped ensure that the public debate is now focused primarily on a single measure. The planned changes to the state pension thus appear to be becoming the first major stumbling block for the coalition without a majority.

It reflects a broader sentiment in society. A majority of voters (53%) oppose the coalition’s plan to link the AOW on a one-to-one basis to higher life expectancy starting in 2033. Twenty-five percent do agree with the plan, according to an Ipsos poll.

Raising the retirement age more quickly would be unfair to people in physically demanding jobs or in poor health. As a result, they would have to keep working even longer, even though the finish line is already so far away for them.

Is that right, too?

To that end, it’s important to first examine exactly what the coalition plan entails. The NOS calculated what the incoming cabinet’s plan means for people of different ages. The younger the person, the greater the impact. People in their sixties will notice (virtually) no change, while someone in their forties is expected to have to wait one year longer to receive their AOW pension—on their 70th birthday. For someone in their thirties, the retirement age will be pushed back by 1.5 years, to age 71.5.

How bad is that for people in their 40s? It varies quite a bit depending on your level of education. According to estimates by Statistics Netherlands (CBS), someone who attended university can expect to live to age 74 in good health. Whether you start receiving your state pension at age 69 or 70 doesn’t make much of a difference in that case. But those who completed a vocational program have already been working in poor health for five years. Asking them to work yet another year on top of that is really pushing it.

However, the three groups listed above are not of equal size. An increasing number of people have completed higher professional education or university studies. Nearly half of 40-year-olds have completed such a program. Less than 20% have elementary school, VMBO, or MBO1 as their highest level of education.

If the AOW retirement age is not raised, those with theoretical training will benefit the most, while the situation for many with practical training will remain difficult.

So, should the retirement age be raised?

Of course, we could all say: leaving the AOW alone is a gift we’re giving ourselves. It may not be necessary for the largest group, but we’re doing it anyway because we can afford to.

We were indeed able to do that for a long time, but that is no longer the case.