Mijnpensioenoverzicht is a useful starting point for your retirement planning. However, the website has a number of serious limitations. In most cases, your retirement date will be later and the real value of your pension will be lower than reported on mijnpensioenoverzicht.
Mijnpensioenoverzicht is a Dutch website that collects information about your pensions directly from your pension providers. It was created in 2011 by a foundation called Stichting Pensioenregister, which is a collaboration of the administrator of state benefits (SVB), the federation of pension funds, and the association of insurance companies. Mijnpensioenoverzicht does not do any independent analysis, but just reports numbers provided by the pension providers.
The information on mijnpensioenoverzicht is a good starting point for your retirement planning. It includes information about state benefits and workplace pensions, which together form the first and second pillars of the Dutch pension system. The website shows the nominal pension you have accumulated so far as well as how much you are expected to reach by the time you retire.
At first sight, these numbers appear to provide a comprehensive view on your financial future. Yet, this is not always the case. In this article we outline several of these reasons.
The numbers reported on mijnpensioenoverzicht are a useful starting point for retirement planning and analysis. However, it is crucial to interpret them correctly and draw your own conclusions. Moreover, the numbers have some important limitations that you should be aware of.
For most people, there are four main limitations:
The retirement age reported on mijnpensioenoverzicht is too low, especially if you are far away from your retirement date.
Different pension providers report different retirement ages.
Pensions on mijnpensioenoverzicht.nl do not reflect your purchasing power at retirement.
The scenarios on mijnoensioenoverzicht.nl are overly optimistic, understating the risk of lower pensions.
The retirement age in the Netherlands is currently 66 years and four months. The Dutch government has decided to gradually increase the retirement age to 67 until 2025. After 2025, the official retirement age will be linked to the future life expectancy in the Netherlands. If people are expected to live longer, the retirement age will increase further beyond the age of 67.
However, mijnpensioenoverzicht does not account for these expected future increases in retirement age after 2025. The retirement age reported on mijnpensioenoverzicht is 67 for anyone born after 1958. If you were born after 1960, this is too low based on the latest estimates for life expectancy from Statistics Netherlands (CBS).
“Your actual retirement age is likely to be higher and your real pension is likely to be lower than the numbers reported on mijnpensioenoverzicht.”
The difference can be large, especially if you are far away from your retirement date. For example, if you were born in 1982, the expected retirement age is 69 years instead of 67 that is shown on mijnpensioenoverzicht. In other words, you will have to work two years longer before you will receive Dutch state benefits.
Increases in retirement age also affect your estimated workplace pensions. Currently, pension funds calculate your pension rights based on 68 as your retirement age (pension calculation age or “pensioenrekenleeftijd” in Dutch). This age is also likely to increase in the future, meaning that you will have to work longer to keep the same retirement income as currently reported on mijnpensioenoverzicht.
The statutory retirement age is the age you will start receiving state benefits. However, workplace pension providers often show the value of your pension for a later retirement date than the one used for state benefits. These inconsistent retirement dates make it difficult to quickly grasp your total pension.
Furthermore, many people would like to start receiving all their different pensions when they start receiving state benefits. This is an option in most pension plans. However, if you decide to retire earlier than the age your provider used to calculate your pension, your total pension will be lower than the amount shown on mijnpensioenoverzicht for two reasons:
First, for each month that you retire earlier than the pension calculation age, you will not pay in contributions to your pension plan and thus accrue less pension rights.
Second, retiring earlier means that you will receive your pension for a longer period. To compensate for this, your pension provider will reduce the amount of pension you receive every month. Currently, if you retire at your AOW age instead of the pension calculation age, your pension will be about 10% lower throughout retirement.
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The numbers on mijnpensioenoverzicht focus on the nominal value of your pension today. This makes it difficult to interpret the numbers correctly.
Due to inflation, one euro today is worth less than one euro at your retirement date. For instance, if inflation is 2%, which is the target of the European Central Bank, 1 euro today is only worth 50 cents 35 years from now.
Thus, the values presented on mijnpensioenoverzicht are not informative about how many goods and services you will be able to purchase when you retire. It is therefore difficult to put these numbers in perspective as it is not possible to compare them to your income and expenses today.
Unless your pension increases with inflation every year, your will be able to consume (significantly) less than the amounts on mijnpensioenoverzicht suggest. Increasing pensions with inflation is the goal of most defined-benefit (DB) pension providers. Increasing pensions to maintain their purchasing power is often called “indexation”, because pensions are linked to a wage or price index.
However, most pension funds have not achieved the goal of full indexation in the past. Moreover, their financial situation is so precarious that it is unlikely that they will index your pension in the future. For many pension funds there even is a risk that they fill have to cut pensions. You can find more details on this topic in our article about the importance of indexation to maintain the purchasing power of your pensions.
To plan your retirement, it is thus important to determine the real value of your pension, accounting for price increases, the likelihood that your pension providers will be able to increase your pensions with inflation, and the risk that your provider even has to cut pensions.
A relatively new feature of mijnpensioenoverzicht is the tab called “vooruitblik”, which shows three possible scenarios for the real value of your pension according to your pension providers: a favorable outcome, an unfavorable outcome, and the most likely outcome.
The values are based on scenarios for the economy, including the development of interest rates, investment returns, and the inflation rate. The scenarios are set by the Dutch Central Bank, and your pension provider computes your pension in each of the scenarios to generate the three outcomes on mijnpensioenoverzicht. An issue with this is that the outcomes are too optimistic in many cases.
For example, ABP, which is of the largest pension funds, has not increased pensions since 2009. Due to this, plan holders suffered a loss of purchasing power of 15%. Even worse, as of July 2020, the regulatory funding ratio is 89%, which is far from the required funding ratio of 128%, meaning that it is unlikely that ABP will index pensions in the future. This is confirmed by the recovery plan of ABP, which states that no indexation is expected for at least 10 years.
Despite these facts about ABP pensions, mijnpensioenoverzicht claims that the most likely outcome is that ABP increases pensions fully with inflation. According to the forward-looking analysis, the most likely pension outcome is equal to the favorable outcome, which in turn equals the nominal pension value today.
Thus, in many cases the forward-looking analysis on mijnpensioensoverzicht appears to be far too optimistic.
The limitations discussed above mean that you may be disappointed later in your life when you notice that you need to work longer and receive a lower pension than you thought. It is better to be well informed now to be able to act accordingly and supplement your pension with additional savings. The earlier you start with this, the better as your savings can earn more returns thanks to the power of compounding.
If you would like to know more about your financial future, we offer a personalized Dutch pension report that includes your estimated retirement age, a consistent reporting of your pensions for the same retirement date, a clear focus on purchasing power rather than nominal values, a more realistic assessment of risk based on the financial position of your pension providers, and much more.