* Please click here for a Dutch translation. *
New Pensions Act passed
As one of its last achievements, yesterday the 'old' Senate passed the New Pensions Act (NPA).
This completes the legislative process on the most radical change ever to the Dutch pension system. The act will enter into force on 1 July 2023 and all Dutch pension schemes must be amended by 1 January 2028 at the latest. During the Parliamentary discussions, the Minister promised the Senate that the previously intended implementation deadline of 1 January 2027 will be extended by (at least) one year.
Employers' choices
It is now up to the employers. And although 4½ years may seem like a lot of time, our experience with retirement change processes is that they take a lot of time. In the first place because an employer will have to consult on two fronts, namely with its employees and/or their representatives, but also with the (intended) pension provider(s). Moreover, there is a large number of choices to be made, including at least:
- The choice between a ‘solidarity premium agreement', a 'flexible premium agreement' or a 'premium benefit agreement'.
- What will be the ambition, the associated premium level and the distribution of the premium between employer and employee?
- What will be the amount of the partner's and orphan's pension insured on a risk basis?
- As of when should the new pension scheme apply?
- The choice whether or not the accrued pension entitlements and pension benefits will be converted from the current pension system to the new pension system (only for pension funds)?
- What happens to the accrued entitlements in the pension scheme with insurers (think of indexation of accrued entitlements to an average/final salary scheme) and PPI (are they transferred to the new pension scheme or not)?
- Is it necessary to compensate certain groups of employees for the disadvantages involved in the transition to the new pension system and, if so, what is the amount and how is the compensation given (within the pension scheme or via wages)?
- Will the existing defined contribution scheme with increasing contributions be continued for the existing group of employees?
- Who will be the administrator of the new pension scheme?
- How will the employee participation process look like (are there trade unions, works councils and/or other employee representatives that need to be consulted)?
- How will the individual change process with employees look like (unilaterally or with - whether or not explicit - consent of all individual employees)?
Some of these change processes obviously require the support of actuaries/pension advisors.
We are happy to help you with implications of a legal nature, such as:
- Supporting with and drafting of the agreements to be made with trade unions, works councils and/or other employee representatives.
- The change path to be chosen with employees: consent or unilateral change?
- The review or drafting of agreements with pension providers.
- Choices of industry wide pension funds: what does the choice of an industry wide pension fund under the new pension system mean for your voluntary participation in that industry wide pension fund or your exemption from mandatory participation in it?
More information?
If you have any questions about this blog or one of our other blogs about the NPA (see below) or if you have a suggestion for a topic for a blog about the NPA, please let us know.
Our blogs about the NPA
