WILLEMSTAD – The General Old Age Pension (AOV) is back at the center of Curaçao’s political stage. For years, the island has had the lowest AOV benefit in the Kingdom—currently only 862 guilders per month. During the most recent elections, political parties pledged to raise it to 1,500 guilders, a promise that now seems within reach.
But beyond the political headlines, a deeper legal and demographic challenge is unfolding.
Legal Debate on Indexation
Lawyers argue that the AOV should have been indexed long ago. According to their reading, the law is clear: when there is economic growth, indexation is mandatory. “The law does not say this is only allowed if it is financially feasible,” they claim, expressing confidence in their case.
Yet, legal experts point out that Curaçao follows civil law, not common law. That means jurisprudence and broader legal context carry significant weight, complicating what might otherwise seem straightforward.
The Real Issue: An Aging Population
More critical than the legal battle is the underlying reality—Curaçao is aging rapidly. In 2011, only 13.6% of the population was 65 or older. By 2023, that share had climbed to nearly 20%, while the proportion of children under 15 fell from 20% to just 14%. The median age is now over 45.
This demographic shift is driven by lower birth rates, longer life expectancy, and migration patterns. The consequences are already visible:
Rising pressure on AOV and other social funds
A shrinking labor force
Growing demand for healthcare and elderly care
Three Pillars of the Pension System
A recent analysis highlighted Curaçao’s pension framework, built on three pillars:
AOV – The first pillar, providing a basic benefit of 862 guilders per month for all seniors.
Employer Pensions – The second pillar. Civil servants are covered by the APC’s defined-benefit plan, but in the private sector, only a few companies offer such pensions. The recently adopted Mandatory Basic Pension Law aims to change this, requiring workers and employers each to contribute at least 1% of income.
Private Savings – The third pillar, including savings, investments, annuities, or real estate. For many, however, this is out of reach—31% of the population lives below the poverty line.
Reform or Collapse
While raising the AOV to 1,500 guilders is seen as an important step, experts warn it is only a temporary fix. Without structural reforms, the system will remain fragile. Policy discussions now increasingly point to difficult but necessary measures such as:
Raising the retirement age
Introducing automatic indexation mechanisms
Prioritizing elder care and housing policies
The government’s recent adoption of the Mandatory Basic Pension Law marks a beginning, but at just 2% in total contributions, it will provide little additional income for retirees.
A System at a Crossroads
Curaçao’s pension system faces mounting pressure. The political push to raise AOV and expand basic pensions is welcomed by many, but without deeper reforms, the island risks a future where pensions and elder care become unsustainable.
As one commentator noted: “The AOV increase is only symptom control. The real question is how to make the system future-proof in the face of our demographic reality.”
