Dutch Act Financial Supervision – a clear overview.

The Dutch Act on Financial Supervision (Wet op het financieel toezicht (Wft)) has come into effect on 1 January 2007. The Wft brings together practically all the rules and conditions that apply to the financial markets and their supervision. In total, the Wft replaces eight existing supervision Acts. The extensive system of supervision of financial institutions that exists in the Netherlands (supervision of banks, insurers, collective investment schemes, etc.) will therefore soon be regulated by a single Dutch Act and subordinate regulations based on this Act.

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Dutch act financial supervision

The idea behind the Wft is that legislation for the financial markets should be targeted, market-oriented and clear. The tasks of the Dutch Central Bank (DNB) (prudential supervision) and those of the AFM (supervision of conduct of business) are to be separated in such a way that there is no overlap. Moreover, the rules governing financial institutions have been simplified and the Wft also reduces the administrative burden on the business sector. The intention behind the Wft was not to revise the material standards for financial supervision but instead to anchor the functional supervision model in law and to make the regulations as consistent as possible across the various supervised sectors and not so much the types of institutions.

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Pension benefits Netherlands 2022 easy online scheme

Pension benefits Netherlands are a set of financial arrangements providing your employee with an income upon retirement. A retirement plan generally consists of three parts:

1. A statutory state pension benefits Netherlands

Pension benefits Netherlands

From the age of 67/68, everyone who lives in the Netherlands receives a state pension under the General Old Age Pensions Act (Algemene Ouderdomswet AOW). State Pension benefits Netherlands. The Dutch AOW pension (paid under the National Old Age Pensions Act, AOW) is a basic state pension. As a rule, everyone who has reached the AOW pension age and lives or has lived in the Netherlands is entitled to an AOW pension. SVB will pay your AOW pension with effect from the day you reach the AOW pension age that applies for you. It makes no difference in which country you live at that time.

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2. Employer Pension benefits Netherlands scheme

Under the administration of an insurer or pension fund, the contributions paid by you and taken from your employee’s paycheck accrue to the retirement benefit of your employee. The pension fund will provide information on the target pension and accrued value in the annual uniform pension statement (UPO).

Calculation pension contribution employee (dutch)

Calculation defined contribution scheme

3. A supplementary Pension benefits Netherlands

Your employee may have made private arrangements to supplement his pension through savings, investments or an annuity from an insurance company or pension fund. This is not a pension benefits Netherlands because there is not an employer involved.

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Dutch pension plan 5 options and direct online pricing

Dutch retirement plan

The future of ten employees financial security will largely depend on the Dutch pension plan. It is important to understand how this plan works and which benefits they will be entitled to. It is also important to understand the choices they can personally make with respect to your pension plan. After all, it is their retirement plan. We have set out the options so that they can make well-informed decisions and choose the Dutch pension plan that meets their individual needs. Please check also the state pension arrangements.

The options described below do not apply to every pension scheme. Which options apply will depend on the pension plan your employer has selected. If you want to know which conditions and choices apply to the employees, check your copy of the pension regulations or review the introductory letter you received from the insurer when you started as a company the pension scheme.

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Options Dutch pension plan

Pension plans in Dutch pension plan offers members a range of options. It is important to make sure that you are properly informed on options such as:

  1. Opting for a higher pension (the benefit they will receive upon retirement) in exchange for a lower partner’s pension (the pension your partner will receive after your death) and
  2. a higher partner’s pension
  3. Retiring earlier or later.
  4. Opting for variable pension benefits.
  5. Part-time pension.

A (Dutch) online calculation page

Higher Dutch pension plan

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Defined contribution pension or a guaranteed pension?

Defined contribution pension

Your employer pays a monthly Defined contribution pension premium towards your pension. Your employer determines whether he pays the entire contribution or if you should also pay a part. What happens with your contribution depends on the choices made by your employer.

Your options Defined contribution pension

When you start a pension plan, you build up (accrue) pension by investing. This is a employee Benefit. We call this your Defined contribution pension. If your employer has given you the option to choose a guaranteed pension, you can use (part of) your contributions for a guaranteed pension. You can also convert (part of) your Defined contribution value into a guaranteed pension.

So depending on the choices made by your employer there are two possibilities:

  1. Defined contribution pension.
  2. Defined benefit pension.

Defined contribution pension investments

Defined contribution pension

The insurer invest the contributions towards your pension by default using the so-called Lifecycle method. Lifecycle investing includes lowering the risks of the investments as you get closer to the retirement date. The idea is that if you are about to retire, you also prefer more certainty about the amount of your pension. If your retirement date is still far in the future, you have more time to compensate for any setbacks. Therefore it is wise to take a little more risk during this early phase with the aim to obtain a higher return. Depending on the choices made by your employer, you can choose to invest in a different way by taking more or less risks.

Advantages of investingDisadvantages of investing
It is possible that the return on the Defined contribution pension premium is higher than expected. Your final pension will then be higher than expected.The amount of pension that you will receive is uncertain. If the returns are lower than expected, your final pension will also be lower than expected.
Depending on the choices made by your employer, you can modify your investments to suit your personal situation. 

Defined contribution pension or purchasing a guaranteed pension

By default, insurers invest your Defined contribution scheme using the Neutral Lifecycle. Once a year you can determine whether you want to build up (accrue) a guaranteed pension in addition to investing.

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Pensionmanagement. Easy but professional. Online pricing.

Good pensionmanagement depends on finding the right balance between competing interests such as attractive pensions, costs, certainty, indexing, risk and manageability. At the same time, proper account has to be taken of the interests of both the employer (the sponsor) and the employees. We have a wide-ranging experience of the various solutions that can be deployed to answer questions.

Pension defined contribution premium online

Questions to be asked pensionmanagement

  • How can organisations use their pension scheme to differentiate themselves from their labour market competitors?
  • How can we minimise the risks and costs of their scheme?
  • How can we offer participants attractive pensions in return for acceptable contributions?
  • How can regulations and pension schemes be made comprehensible and operate transparently?

Pensionmanagement = Employee benefit

pension management

Good pensionmanagement enables organisations to provide pension schemes meeting the needs of current and future employees, while also helping them to achieve their organisational objectives. Good pensions mean employees can count on a financially secure retirement, while employers can attract and retain the right people at an acceptable cost and level of risk.

Pension balance

The key to good pensionmanagement, therefore, is to find the right balance between the various competing interests. Providing an attractive pension scheme comes at a cost, while there is also a tension between guaranteeing future pensions and preserving their value. Employers seeking to reduce risks by contracting out their pension scheme management also need to ensure they maintain sufficient control over the details of the scheme.

Pensionmanagement specialist

We have the knowledge and experience needed to advise organisations and provide them with a policy framework for resolving these issues. The wealth of knowledge built up during the sector’s long history means it has the expertise to deal with wide-ranging forms of pensions, whether they are defined benefit or defined contribution schemes or a hybrid form. And whether they are part of a sector pension fund or an organisation’s occupational fund or directly insured by an insurance company.

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Call me please

If you think I might be able to help you with pensionmanagement
Gerrit-Jan Doorneweerd, registered Pension Advisor,
Amsterdam, +31 (0)20 6200825
Mobile, 0651 471 9 – six – five. (Also in the evening and weekend.)
Please give me a call or send me your information below

Calculations

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The solution for the Dutch pension regulation

Every Dutch pension plan is a customised product and needs regulation. The opportunities for structuring pension plans are extremely wide-ranging. Choices need to be properly substantiated as these plans cover periods of several decades, and neither participants nor sponsors want to face unpleasant surprises. We will be pleased to help you complete your pension jigsaw.

The second pillar of pension provisions is important for businesses in that it is part of the compensation and benefits packages they offer and so a way for them to attract and retain staff. This means employers need to consult their employees or employee representatives to identify the pension plan most accurately matching the characteristics and wishes of their current and future employees, the employer’s own needs and resources, the standards and agreements applying in the sector and also the prevailing legislation and regulations.

There are many ‘buttons’ to select in this respect (see box). In other words, pension plans can be customised to suit individual situations. The choices to be made include opportunities to select employee contribution and pension levels, employer contributions, opportunities to cover various risks and the freedom to choose when to start receiving or paying out pensions.

Information Employee Benefits Netherlands

Employee liability and managerial liability are risks that can significantly affect the business profits in the Netherlands. There are few experts in the Netherlands who can advise in terms of the working conditions for the employees, pension, and business risks. Therefore, when choosing an Dutch adviser, take the advisor who is qualified and in possession of all the obligations that the supervisor requires.

Gerrit-Jan Doorneweerd is an independent insurance broker that meets all the requirements. The pension advice, Employee Benefits Netherlands and Business insurances are therefore in good hands with me and my company.

Options Dutch pension plan

Pension plans in Dutch pension plan offers members a range of options. It is important to make sure that you are properly informed on options such as:

  1. Opting for a higher pension (the benefit they will receive upon retirement) in exchange for a lower partner’s pension (the pension your partner will receive after your death) and
  2. a higher partner’s pension
  3. Retiring earlier or later.
  4. Opting for variable pension benefits.
  5. Part-time pension.

A (Dutch) online calculation page

Higher Dutch pension regulation

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Divorce/separation

If your employee is divorced or separated, his or her former partner is entitled to half the retirement pension built up during the marriage. The former partner can also waive this pension equalization. Such an arrangement must be set out in the divorce settlement.

Retirement pension scheme – Equalization of pension benefits

Former partners are legally entitled to half of the retirement savings accumulated during the marriage or registered partnership. Your former partner’s entitlement to these pension benefits will end at the time of your death. If your former partner should die before you, you will regain entitlement to the full pension benefits.

You and your former partner may agree to deviate from these standard arrangements. You may, for example, agree with your former partner that he or she waives pension equalization or a special partner’s pension.
Any such arrangements must be laid down in a prenuptial or postnuptial agreement or in a divorce agreement.

Partner’s pension – Divorce

Provided that an insurance policy is in place, you will have built up a partner’s pension for your partner until the date of separation or divorce. After the divorce, your former partner will retain entitlement to this pension, provided that the pension scheme provides for accrual of entitlement to a partner’s pension. He or she will receive this benefit from the date of your death. As this concerns a former partner, it is known as the ‘special partner’s pension’.

Remarriage/new partner

If you have a new partner in accordance with the definition of a partner in the pension regulations, he or she will be entitled to the remainder of the partner’s pension after deduction of the former partner’s entitlement.

Amount of the special partner’s pension

The amount of the special partner’s pension differs between pension schemes, and may depend on whether you die before or after the retirement date. Some pension schemes feature a partner’s pension on a risk basis, which means that your former partner will not receive a special partner’s pension. The insurer will notify you and your former partner, if applicable, of the amount of the special partner’s pension.

Orphan’s pension

Provided that an insurance policy is in place, your children will retain their entitlement to an orphan’s pension after your divorce. Whether they live with you or with your former partner is of no consequence to that entitlement.

  • If you think I might be able to help you of your business
    Gerrit-Jan Doorneweerd, registered Pension Advisor,
    Amsterdam, +31 (0)20 6200825
    Mobile, 0651 471 9 – six – five. (Also in the evening and weekend.)
    Please give me a call or send me your information below

Information and Calculations

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30% ruling pension benefits The Netherlands

Pension accrual and the 30% rule (30 percent ruling) for expats

If certain conditions are met, expatriates may be eligible for the 30% rule. This arrangement means that there is a tax-free allowance which will be given up to 30% of wages. The tax free fee is for the extra cost of the temporary residence of the expat in the Netherlands. This allowance is tax not paid.

Pension benefits

In principle you usually do not build up pension on the tax-free reimbursement of the 30% rulers. The pension benefits granted by your employer are based on your taxable salary; thus lower since the “top” is taken off as a tax free reimbursement.

Exceptions

The main rule is that the 30% reimbursement gives no accrual pension. However there are two exceptions:
1. Incoming employees accruing pension over the 30% rule with an initial accrual pension prior to July 1, 2002. The pension may be continued until the end date of the existing approval of the tax authorities with the relevant employer. This exception applies until July 1, 2012 (or earlier termination date of 30% Decision);
2. If exchange of remuneration components held under a cafeteria plan.

Comment

Due to the 70% level of pension salary the widows and orphans pensions are also 30% lower. This gap is easily compensated with a private life insurance.

If you think I might be able to help you with your business
Gerrit-Jan Doorneweerd, registered Dutch Employee Benefits & Insurances,
Amsterdam, +31 (0)20 6200825
Mobile, 0651 471 9 – six – five. (Also in the evening or weekend)
Please give me a call or send me your information below

Information and Calculations

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An employee reaches retirement age – 4 steps

draaitrapStep 1
Six months before retirement, an employee will receive a letter from the pensioninsurer of pensionfund containing:

  • A statement of the regular pension benefit.
  • Any options available (earlier or later retirement, etc.).
  • A form to supply any missing personal details.
  • A payroll tax statement.
  • A statement with respect to conversion of dependant’s and retirement pensions.

Step 2
An employee provides the pensioninsurer of pensionfund with:

  • A completed form before the retirement date.
  • The payroll tax statement.
  • The conversion statement, if applicable.

Step 3
The pensioninsurer of pensionfund carries out the administration.
Theu process the information supplied and determine the final entitlement.

Step 4
The pension insurer of pensionfund makes the initial pension payment to your employee in accordance with the pension regulations.

Tip: It can be profitable for an employee to combine different pensions and annuities. 

30% ruling pension The Netherlands

The Netherlands has a special tax regime for expatriates, the so-called 30% ruling benefits, which provides a substantial income tax exemption of up to 30%, for a period of up to 120 months. This 30% ruling pension is viewed as a reimbursement for the extra costs involved in living abroad.

  • According to this rule, the employer may grant the employee a tax-free allowance of up to a maximum of 30% of his or her remuneration. The remuneration includes incidental and flexible forms of income such as bonus payments and stock options. Termination and pension payments are excluded.
  • In order to qualify for the 30% ruling, the following conditions must be met:
  • The employer must make a reasonable case that the employee possesses specific expertise that is not available, or is scarce in the Dutch labor market
    • The employee must be recruited from abroad
    • The employer must be a Dutch wage tax-withholding agent
    • The exemption is available for a period of 10 years (120 months).
  • After a period of five years, the tax authorities can request that the employer demonstrate that the employee still meets the conditions.

Calculation pension contribution employee (dutch)

Calculation defined contribution scheme

Pension accrual and the 30% ruling pension

If certain conditions are met, expatriates may be eligible for the 30% ruling. This arrangement means that there is a tax-free allowance which will be given up to 30% of wages. The tax free fee is for the extra cost of the temporary residence of the expat in the Netherlands. This allowance is tax not paid.

In principle you usually do not build up pension on the tax-free reimbursement of the 30% ruling. The pension benefits granted by the employer are based on your taxable salary; thus lower since the “top” is taken off as a tax free reimbursement.

The main rule is that the 30% reimbursement gives no accrual pension. The 30% ruling pension consequences can be complicated. A correct pension scheme solution is possible. Due to the 70% level of pension salary the widows and orphans pensions are also 30% lower. This gap is easily compensated with a private life insurance. Several other solutions for the 30% ruling pension problems are possible.

If you think I might be able to help you of your business with the 30% ruling pension:

Gerrit-Jan Doorneweerd, registered Pension Advisor,
Amsterdam, +31 (0)20 6200825
Mobile, 0651 471 9 – six – five. (Also in the evening and weekends.)
Please give me a call or fill in the form.

Information and Calculations

English contact form General (Third party) Liability application form Directors and Officers Indemnity Premium Hiscox CyberClear Insurance - premium IT Information Technology Liability - Premium Management Consultancy Liability = premium Pension defined contribution - calculation Audio - Dutch Business risks and insurances Complete list - Dutch Business Insurances

Tax calculator

An application that accurately calculates an indicatio of the benefits of the ruling

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