Recommended actions

We recommend that all employers - including those who already have a defined contribution scheme with a flat premium or a progressive premium scale - take the following actions:

• Identification of applicable pension schemes that require amendments.
• Check minimum participation age in pension scheme.
• Check partners' definition in pension scheme, the coverage of survivor's pension, the level of the defined contribution as well as the contribution level in the voluntary top-up pension scheme.  
• If applicable, consider whether to use the exceptions for defined contribution and defined benefit schemes.   
• Identification of consultation requirements and consultation bodies.
• Inventory of risk attitudes of participants, former participants and/or retirees.
• Analyze potential scenarios and costs for pension scheme redesign.
• Where required, obtain (financial) mandate for negotiations with consultation bodies. 
• Start negotiations with consultation bodies.  
• Consider the pension reforms in any current salary planning, benefits harmonization, pension scheme redesign or pension contract renewal. 
• Where relevant, take account of the pension reforms in any corporate decisions.

Please contact one of us in the event you have any further questions concerning the Dutch pension reforms, the (strategy with respect to the) redesign of the pension scheme in line with Dutch pension reforms and/or the applicable consultation process and bodies.

Brief overview pension reforms

• Defined benefit schemes need to be amended in defined contribution schemes.
• Age-related defined contribution schemes are no longer allowed and need to be amended in flat-rate defined contribution schemes. Exceptions apply for voluntary top-up and net pension schemes as well as:
  • Age-based defined contribution schemes existing on 30 June 2023
  • Defined benefit plans (administrated with an insurance company) existing on 30 June 2023 which will be amended in an age-based defined contribution plan prior to the end of the transition period
• The maximum tax allowed pension contribution amounts 30% of the pensionable salary minus franchise (excluding administration costs and contributions for risk based coverage). During a transition period till 1 January 2037, the maximum tax allowed pension contribution will amount 33% for compensation purposes. Please note that the 30% contribution is subject to future economic circumstances (interest and expected yield) and could be amended every five years based on a statutory adjustment mechanism.
• Standardization of partner pension. The definition of partner pension will be made uniform. Furthermore, partner pensions paid out upon death prior to retirement will all become risk-based and capped at 50% of the pensionable salary (regardless of years of service). Partner pensions which are paid out upon death after retirement will be capped at 70% of the retirement benefits. 
• The tax framework for net pension will be almost equal to the framework for gross pensions. 
• When amending the pension plan in line with the Future on Pensions Act, the employer is in principle obliged to draft a transition plan. A transition plan takes - amongst others - into account the considered options, the consequences related to the considered options, the choices made and offered compensation.
• The employer has to submit the transition plan to the works council and the individual employees during the consultation process. Subsequently, the transition plan needs to be submitted to the pension provider.

Timeline Dutch pension reforms

It is unclear whether the deadlines for the transition plan and mediation will also be postponed due to the postponement of the transition period to ultimately 1 January 2028.