Setting up company pension in the Dutch market.

Setting up a company pension in the Dutch market can be quite difficult for employers from outside the Netherlands. Luckily we are here to help employers to make the right decisions and give them professional advice on implementing a great company pension for their employees.

Company pension administration

Pension administration is a process that should be done carefully and professional. We’ve seen too many times that employers make mistakes during this process which can lead to lots of problems. Mistakes in pension administration are easily made, think of the calculations of salary of their employees. When you calculate the salary of your employees you have to keep in mind the 13th month, holiday bonusses and other add-ons to the salary. Sometimes the insurer asks to include the bonusses and sometimes they want it excluded. As you might expect, this can result in a messy pension administration that takes time to resolve for a professional. This is why we recommend to let it be done by us. When you give us permission to do the administration you can hold us accountable, so you won’t lose any sleep at night on these matters.

Dutch pension price example:

There is a max price limitation in premium of 30% of the Dutch pension salary.
This is legally capped at a salary of € 137,800.
Please note that these are approx. calculation. The premiums depend on age and chosen insurer.

Want to calculate your pension price immediately? Click here.

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Choosing between salary compensation under the new Dutch Future of Pensions Act (Wet Toekomst Pensioenen, WTP) flat-rate premium or opting for the transitional rule (eerbiedigende werking) will be one of the most important decisions in the Netherlands in the coming years. Under the new WTP law, there are two main options, each with its own advantages and disadvantages, and the law requires a well-considered decision. Pensions are an important employment condition, but there are labor law differences to consider. Employment terms will change significantly, as will the financial implications for both employers and employees, from now in 2024 until the end of 2027. Postponing this decision also has both benefits and drawbacks.

WTP Salary Compensation Calculation To calculate salary compensation with a flat-rate premium, we use a calculation to provide an estimate of the expected costs over the next 10 years.

WTP Salary Compensation Pension Calculation The current scheme is shown on the left, the transitional rule in the middle, and the flat-rate premium on the right. In a WTP pension calculation, you will receive a cost overview for the next 10 years for each of the three options. The fixed premium is your current average premium (excluding additional insurance coverages such as survivor’s pension, premium waivers, disability pensions, and other costs). You will receive a statement of WTP salary compensation when choosing a fixed premium. Many additional details are provided to help make a sound financial decision. Always consult a certified second-pillar pension advisor for the evaluation. We use several assumptions as part of this assessment.

Dutch company pension consultant communication

Communication towards company stakeholders is legally mandated under the Future Pension Act (WTP). Who informs them with what information and when? This involves the tax authorities, pension provider, participants, accountant, shareholders, and payroll administrator.

Coordinating the company pension consequences upon retirement, disability, and death of an employee requires direct technical action and careful guidance by a Dutch pension consultant. Providing information to and preparing meetings with the Works Council (OR) or employee representative body (PVT) is also essential. A well-prepared employer can manage pension schemes seamlessly with our support. Documenting pension texts in employee guides and employment conditions can prevent surprises. The intended pension company scheme must be consistent with the promise in the employment contract, the employee handbook, and the Pension 1-2-3 information for the employee.

Own contribution for employees in professional pension administration

If employees have an own contribution in their company pension, it must be administratively processed well. Adding or saving up is a popular way for employees to supplement their pension pot, but the bill, if not the valuable time, usually falls to the employer. Without careful supervision, this can cost employers a lot of money.

Administrative guidance and control in these transfers are important for a healthy system. Some employees want to know exactly what the pros and cons are and always have small questions they otherwise first ask the employer. Although this is their right, within most companies the practical knowledge to handle this efficiently is often lacking. Company pension providers usually give only biased information.

(Sickness) absenteeism and pension management

Sickness absence has an important influence on company pension management activities in several respects. To what extent will the premium have to be paid? (UWV info) How is care leave handled and what happens if the absenteeism changes from sick leave to incapacity for work? Are there any consequences for the progress of pension accrual for a company? At what time will the pension insurer be informed and which administrative route must be followed by the Dutch pension consultant? Here, too, a connection is sought with the information as recorded in the employment contract and the personnel guide / commitment.

Calculation partner’s pension (ANW)

Partner’s pension before the pension date is a percentage of the company pension base multiplied by the number of years of service. The partner’s pension can be insured based on final pay or average pay. Its maximum accrual percentage for final pay is usually 1.160% of the pension base per year of service. And the maximum accrual percentage for average pay is often 1.313% of the pension base per year of service. Also, the risk premium for partner’s pension comes on top of the available premium.

The government ensures with the survivor benefit from the Surviving Dependants Act (Anw) that survivors have a basic income. The Social Insurance Bank (SVB) pays out this benefit. We, as your Dutch pension consultant, can eleborate further if needed.