The Pension Agreement (Pensioenakkoord) forces every employer in the Netherlands to think about the future pension agreement with their employees. Almost all employers in the Netherlands have to adjust their pension agreements in the next few years in line with the new pension system. Employees who currently accrue pension in a defined benefit agreement will move to a different type of pension agreement, a defined contribution agreement. This is in line with the new fiscal framework for pension accrual. In the new pension system, pension accrual is only capped by an age-independent tax limit for the contribution (flat-rate).
Employees whose expected pension results are affected by the transition to age-independent contributions and related pension accrual must be adequately compensated. In many cases, this will be done through additional contributions. This certainly applies to existing defined contribution schemes and insured defined benefit schemes. In the case of pension funds, there is also the possibility of (partially) financing compensation from the reserved assets.
The survivor's pension in the new pension system will also change substantially. In the new pension system, there will be one standard definition of partner. This results in more clarity on whether someone is eligible for a partner’s pension in a pension scheme. Furthermore, the partner's pension in the event of death before the retirement date will only be allowed as a risk-based insurance.
It would be best for all employers not to wait and to start working on the employment condition pensions, especially if your current pension contract expires soon, now is the time for you as an employer to start preparing for the new pension system. Important to consider here is the exception for employers with an existing pension scheme based on an age-dependent contribution. Employers that have such a pension scheme in place prior to the Future of Pensions Act entering into force are allowed to continue an age-dependent contribution ladder for existing staff after the transition to the new pension system. This could be a solution to possible compensation issues.
The Pension Agreement represents a huge transformation of our pension system. Almost all organisations have to adjust their pension scheme and its financing to the new legislation. As an employer, you will face considerable challenges and it could be difficult to maintain an overview. It is best to consider the challenges of the pension agreement in conjunction with your overall remuneration strategy. This will help to reduce cost increases and increase your employees' appreciation of the terms of employment. With our integrated approach, our focus on cooperation and with the help of specially developed digital solutions, we can guide you step by step to a new pension scheme. We understand that there is no single solution for aligning your pension and benefits package with your HR strategy. If you wish to find out more, please do not hesitate to contact us.