The Dutch government has postponed the introduction of the ‘bedrag ineens’ (lump-sum amount) pension withdrawal option until July 2026. The measure, which would allow retirees to take out up to 10 percent of their total pension savings in a single payment, was originally scheduled to take effect on July 1, 2024, NOS reports.
Minister of Social Affairs Van Hijum informed the Eerste Kamer in a letter that further clarity is needed regarding the tax implications of the lump-sum withdrawal. “Withdrawing a lump sum affects income and may impact eligibility for benefits such as healthcare or rent allowances,” the minister stated. To address this, the government will develop an online calculation tool to help individuals assess the financial consequences of the withdrawal.
The decision aligns with warnings from budget advisory organization Nibud, which has cautioned that retirees should not overestimate the benefits of a lump-sum withdrawal. The organization has emphasized that while a lump sum could be used for major expenses—such as purchasing a camper, boat, or funding a grandchild’s education—it would also lead to a lower monthly pension payout.
For instance, an individual with 250,000 euros in pension savings could withdraw 25,000 euros at once. However, this could result in a decrease in their monthly pension income. Additionally, the temporary increase in income could cause some retirees to lose eligibility for government benefits, such as healthcare or housing subsidies.
The delay also addresses concerns raised by pension funds, which are currently preoccupied with transitioning to a new pension system. The transition involves converting collective pension savings into individual pension pots, with monthly payouts fluctuating based on economic conditions. Most pension funds are set to complete this transition by late 2024 or 2025.
The Pensioenfederatie, the umbrella organization representing pension funds, has advocated for sufficient preparation time before implementing the lump-sum withdrawal policy. Introducing the measure in mid-2024, they argued, would place an excessive administrative burden on funds already managing the complex pension transition.
The Tweede Kamer approved the lump-sum withdrawal option last year, and the Eerste Kamer is set to vote on it this spring. While a majority currently appears to support the plan, its implementation will now be postponed by two years to allow for further preparations.
