7.5 Link between life expectancy at age 65 and 1st and 2nd pillar retirement age The Raising of the State Pension Retirement Age and Standard Pension Retirement Age Act (Wet Verhoging AOW- en Pensioenrichtleeftijd) of July 12th, 2012 links the first pillar (State pension) retirement age and the standard retirement age in the second pillar (employers’ pension schemes) to period life expectancy. The development of the State Pension retirement age and the standard retirement age using the latest views based on Projections Life Table AG2020 and the adjustments from the Outline agreement of June 5th, 2019 is summarised in graph 7.4. However, the actual adjustment of the State Pension age is linked to the CBS estimates, so the values shown are to be considered as indicative. 65.5 66.0 66.5 67.0 67.5 68.0 68.5 69.0 69.5 65.0 2020 2024 2028 2032 2036 2040 2044 2048 2052 2056 2060 State Pension age Standard retirement age Graph 7.4 Development of State Pension retirement age and standard pension age based on AG2020 Raising the State Pension retirement age Raising the State Pension age is done in three-month steps. The adjustments depend on the level of the average remaining period life expectancy at age 65, as estimated by CBS. The Pensions agreement of June 5th, 2019 stipulates that the State Pension age will be set to 67 years in 2024. Also, the link to life expectancy is adjusted to curb the rise of the State Pension age: the adjustments to the State Pension age after 2024 are based on 2/3rds of the expected rise in remaining life expectancy at age 65. Because the State Pension age is adjusted in 3-month steps, a minimum increase of 4.5 months in remaining life expectancy is required for a further adjustment (taking into account 2/3rds). According to Projections Life Table AG2020 the State Pension age will increase to 67 years and 3 months only in 2030, because that is when the remaining life expectancy is expected to be up 4.5 months from the 2024 reference value of 20.64, mentioned in the bill “Adjustment Link State Pension and standard retirement age”. Table 7.6 shows the expected State Pension age development in full year steps. Projections Life Table AG2020 Results 30
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