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Introduction General Pension Fund

Last update: December 16, 2016

As of January 1, 2016, the general pension fund (APF) was introduced. This fund facilitates a new combination of different pension schemes in so-called ‘rings’. This facilitates all kinds of benefits in the interest of the participants, such as reducing administrative burdens and decreasing costs related to asset management and administration. Each ring has its own investment policy and indexation target. As in every other pension fund, the board is responsible for a balanced consideration of the interests of all parties involved. Although many APF’s are established by insurers, an APF must be able to make decisions independently. The insurers try to use an APF to expand their asset management and administration systems.

Like other [...]

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AOW pension age and retirement age increase again

Last update: October 31, 2016

The AOW and retirement age increase because citizens live longer. Life expectancy increase in 2022. The Statistics Netherlands (CBS)  published the new population forecast today.

The AOW pension age is linked to the life expectancy as from 2022, and will increase in steps of 3 months. De AOW pension age is expected to increase again in the next years. On the website of the SVB people can calculate their AOW pension age.

As a result of the increase of the life expectancy the standard retirement age will increase from 67 years to 68 years. The standard retirement age is used for the yearly maximum fiscal pension accrual.

pensionadvice AOW and retirement age

Higher contributions possible in defined contribution schemes

Last update: October 11, 2016

We have seen low market interest rates for quite some time now and this does not seem to change any time soon. This has consequences for pensions accrual. 

The contribution the employer pays for a defined contribution scheme is based on a graduated fiscal interest calculation with an actuarial interest rate of 4% or 3%. This means that 4% or 3% whole life return (also after retirement) needs to be yielded to achieve a pension payment that is comparable to the maximum average pay pension that is fiscally allowed (retirement pension of 1.875% of the pensionable salary per year). But due to the low market interest rate this is not attainable: in practice contributions are too low to [...]

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Employees get more influence on their retirement pension

Last update: October 1, 2016

Good news for works councils! Works councils get the right to endorse terms of employment aspects of the pension scheme, irrespective of whether the pension administrator is a pension fund, insurer or a defined contribution fund. This does not apply if the pension scheme was established via a collective labour agreement (CAO) or if there is a sectoral pension fund the company was obliged to join. This amendment of the law, which takes effect from October 1, 2016, closes a loophole in the current endorsement legislation. The works council also gets the right to endorse the choice of the pension administrator.

Budget Day (Prince's Day) 2016: proposed adjustments to pensions

Last update: September 26, 2016

On Budget Day, a few fiscal measures were proposed to slightly simplify the pensions administration. Let’s hope that these proposals will be adopted.

Pension commencing date back to 1st of the month

In 2012, the commencing date of the Old Age Pension (AOW) was moved from the 1st of the month to the day the pensionable person was born (the 14th for example). The tax authority assumes that the retirement benefit also commences on the actual date when the participant reaches the pensionable age. However, pension administrators (almost) always use the 1st of the month as the commencing date. This could lead to a fiscally excessive pension, because pension that commences on [...]

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Defined contribution scheme improvement Act

Last update: July 15, 2016

On September 1, 2016, the Defined Contribution Scheme Improvement Act came into effect. This Act makes it legally possible within a defined contribution scheme to continue investing after the retirement date, instead of purchasing a fixed-rate periodic benefit (annuity). The resulting annual pension benefits are expected to be higher on balance. However, the benefits will fluctuate from year to year (within a certain bandwidth). The participant will not only have to choose to continue investing on the retirement date, but also in the years before this date. When purchasing a fixed-rate periodic benefit, the interest risk will be decreased gradually over 10-15 years before the retirement date, to ensure that the expected [...]

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Towards a new Dutch pension system?

Last update: July 9, 2016

On July 6, 2015, State Secretary Klijnsma (Social Affairs and Labour) sent a letter to the Lower House about the main ideas for a future organization of the supplementary pension system in the Netherlands. “It is essential that we retain the strong elements of our pension system and enforce it with new elements for the future. This way, we can ensure that the pension system will better suit the needs of the people and the 21st century labour market.”

The 4 main ideas are:

  • Adequate pension for all working people
  • Discontinuation of the uniform contribution system
  • A more transparent pension, with room for collectivity, and
  • Tailored solutions

By now, the options have been explored a bit further and in July 2016, the [...]

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