The table below summarises the elements of our proposal to change your pension scheme. The table is followed by more detailed information on each element. Not all of the elements necessarily apply to your scheme.
|1. Retirement age||68 years|
|2. Current defined contribution||Assessment on the basis of the limits for tax purposes as of 1 January 2018. If your current contribution does not comply with the limits, we propose to move your scheme to an extended graduated scale for tax purposes.|
|3. Scope for additional savings||Under an extended graduated scale for tax purposes, your employees will have greater scope for additional savings.|
|4. Assessment of excessive pension accrual||Under an extended graduated scale for tax purposes, an assessment of whether excessive pension is accrued is carried out with regard to certain life events.|
|5. Partner’s and orphan’s pension||1 extra year of service, and therefore slightly higher pension|
|6. Surviving dependant’s (Anw) gap pension||1 year extra cover and longer period of benefit payments to survivor|
|7. Occupational disability pension||1 year extra cover and longer period of benefit payments|
|8. Waiver of contributions||1 year extra cover and longer period of waiver of contributions, therefore pension accrual|
Is your current pension scheme based on a retirement age of 67 years? If it is, we will base the proposal on an increase of the retirement age to 68 years. The retirement age will be adjusted to 68 years for both the accrued value and the future contributions. The value accrued until the increase of the retirement age will then be invested by us in the same manner as the future contributions.
2.Current defined contribution
We assess whether you will still comply on the basis of your current defined contribution with the new limits for tax purposes as of 1 January 2018. If that is the case, the current defined contribution can remain unchanged within the current limits for tax purposes. If it is not the case, we propose to move your defined contribution scheme to another maximum graduated scale for tax purposes. By doing this, you will avoid having to reduce the defined contribution.
3.Scope for additional savings
If your scheme remains within the current limits for tax purposes, the possible scope for additional savings will be reduced slightly. If your scheme will be subject to more extended limits for tax purposes as of 1 January 2018, this will, conversely, create greater scope for additional savings. The current defined contribution graduated scale will in that case be assessed against an extended graduated scale for tax purposes. The scope for additional savings is the difference between the defined contributions in these two graduated scales.
4.Assessment of excessive pension accrual
If we switch to an extended graduated scale for tax purposes for your scheme, the Dutch Tax and Customs Administration imposes the condition that an assessment is carried out at certain times to ascertain that the employee has not accrued excessive pension. This already applies at present for a 3% graduated scale for tax purposes or a graduated scale based on market interest rates (“marktrentestaffel”). We are required to assess this on the retirement date and in the event of a value transfer to another scheme. The assessment in the event of a value transfer is not necessary if it is not mandatory for the new scheme. The likelihood that an employee will accrue too much pension due to the extended graduated scale is small, as the maximum pension that an employee can accrue is a pension based on an average salary scheme, in which the entitlements accrued are annually indexed by 3% (pension adjusted to the wage index).
5.Partner’s and orphan’s pension
The maximum permitted pension accrual percentage for partner’s and orphan’s pension has not changed. The amount of the partner’s and orphan’s pension is based on the number of years of service that an employee can reach until the retirement date. The number of years of service will increase by one due to the increase to 68 years. The partner’s and orphan’s pension will therefore increase slightly. The fee will remain unchanged, but the contribution will increase slightly due to the increase of the amount of the pension.
6.Surviving dependant’s (Anw) gap pension
If the scheme also includes an insurance for the surviving dependant’s (Anw) gap pension, the cover in the event of death will also continue to the age of 68 years and any benefits paid to the survivor will also continue to the age of 68 years or the survivor’s state pension age, if earlier. The fee will increase slightly due to this extension of cover and benefits.
7.Occupational disability pension
If the occupational disability pension is also insured, the cover for occupational disability will also continue to the age of 68 years and any benefit payments for the disabled member will also continue to the age of 68 years. The fee will increase slightly due to this extension of cover and benefits.
8.Waiver of contributions in the event of occupational disability
Increasing the retirement age to 68 years means that the cover for occupational disability will also continue to the age of 68 years, as will any period of contribution-exempt pension accrual. The fee will increase slightly due to this extension of cover and of the period during which contributions are waived.
Does your pension scheme need to be adjusted to the retirement age of 68 years?
Pension schemes are still permitted to use the ‘old’ retirement age of 67 years as a basis. In that case, you will nevertheless be faced with the amendments 2, 3 and 4 described above. The consequence, however, is that a shortfall will arise due to the difference between the retirement age of the employees and the (rising) state pension age (67 years and 3 months). This applies to all elements.