The new Pension Act: What do you need to do as an employer?

The pension that employees grow while at your business will change under the new Pension Act (2023). Employees accrue this supplementary pension as additional income on top of the basic pension that pensioners receive from the government under the General Old Age Pensions Act (AOW).

A pension provider is a pension fund or insurer that ensures that employees and employers save pension money together. The employer pays the largest part of the contribution. A smaller part of the contribution is deducted by the employer from the employee's salary each month.

Pension providers have until 1 January 2028 to make new agreements with employers and employees and to implement those agreements. That may seem far away, but pension providers need 6 to 18 months to make this switch. Do not wait for your pension provider to get in touch, take action yourself. Make new pension agreements with your employees on time. And draw up a mandatory transition plan (in Dutch) together with a pension provider.

This changes for employers

The Pension Act will change the agreements with your employees. What exactly you need to do depends on whether you are affiliated with a collective labour agreement (CAO) and whether a pension is mandatory.

Is a pension mandatory or not?

Not all types of companies and organisations are obliged to offer their employees a supplementary pension. Are you affiliated with a CAO or an industry pension fund, such as for the catering industry or construction industry? Then it is mandatory, no matter how small your company or organisation is.

Affiliated with a CAO

If your business or organisation is affiliated with a CAO, you do not need to do anything for the time being. Trade unions and pension providers are making new pension agreements. Your employees will then receive information about this. Your role in this depends on the new agreements.

Not affiliated with a CAO

Is your business or organisation not affiliated with a CAO? Then you must make agreements yourself with your employees and pension provider. You must then have these new agreements recorded in the pension agreements with the pension provider. For example, you will need to consider how your provider will invest the contributions and whether you will opt for a transitional arrangement.

Transitional arrangement

A transitional arrangement allows employees who were already employed to remain in the old pension scheme. New employees are automatically covered by the new pension arrangements. If you do not opt for a transitional arrangement, all employees will transfer to the new pension scheme. Even employees who were already employed. For employees between about 40 and 55 years of age, compensation may be necessary. This is because their age means they have less time to build up a pension under the new pension scheme

Premiums and investments

You also have to think about the pension scheme itself. For example, what part of the premium do you withhold from the salary? You also determine how the pension provider invests the premium: for each employee separately or for all your employees together.

You also make agreements with the pension fund about how much risk they take when investing. You can take the age of your employees into account, among other things.

 

What changes for employees

Due to the new act, pension benefits move with the economy. If the economy is doing well, the pension will increase. If things go less well, the pension will decrease. 

Each employee receives their own pension pot, making it easy to see how much pension they have accrued. This should put an end to employees having multiple pots because they have built up pensions with different employers and providers.

Your employees receive an overview of the investment results from their pension provider every year. This states what this is expected to mean for the amount of their pension benefit. Pension providers are no longer allowed to make promises about the amount of that benefit in the long term.

In addition to the pension for your employees, it is also wise to think about your own pension.