Using your own bank account to accrue pension

BeFrank
28 Oct 2015

Dutch people need to be able to take greater personal responsibility when accruing their pensions by having their own pension bank account for example. That’s the change that Folkert Pama, Head of the Management Team of BeFrank, is advocating for.

Recent figures published by Statistics Netherlands (CBS) have revealed that there were almost 1.9 million employees on flexible employment contracts in the Netherlands in the second quarter of 2015; a hundred thousand more than the previous year. The number of employees with a flexible employment contract has been steadily rising since mid-2010.

Your own pension account
35-year-olds tend to have an average of seven jobs listed on their CV, a trend which according to labour economists is set to continue over the next few years. The problem is that our pension system is in no way designed for that. Pama is therefore making a case for radical change. He feels Dutch people should be given control over their own pension accrual. ‘The idea is that the worker, whether this is someone who is permanently employed or self-employed, gives their employer or client one bank account number for their current salary and one for their salary for later, meaning for the pension account. That’s much more in keeping with this day and age.’

Transparent and clear communications
In addition, BeFrank is fighting for more transparency and clear communications in the sector. ‘Pension money is being invested and you have to be clear about that. The end sum could be lower or higher than expected. That’s why it’s important to give employees insight into their own pension and give them the opportunity to exert a direct influence over it. In this situation, transparency and clear communications are key.’

Online services
Pama was involved in the establishment of BeFrank, the Netherlands’ first Premium Pension Institution (PPI) in 2010 – a new type of pension provider offering modern pension schemes. ‘We want to bring pensions closer to the people. With us, everything can be managed online and you can check the current status of your pension with just a few mouse clicks.’