Pension Archives

What is an RVU?

An RVU is an Early Retirement Scheme that serves to bridge the period from dismissal up to the state pension date of an (ex) employee.

What is an RVU tax?

With the idea that employees have to work longer, the tax authorities did not allow such an RVU until recently. If the tax authorities ruled that there is an RVU, the benefit was taxed with a final tax of 52%.

What does the relaxation of the RVU levy entail?

The employer may pay the employee up to a maximum amount equal to the net AOW benefit for a maximum of 3 years to bridge the period up to the AOW date. This compensation is no longer taxed with a final levy of 52%, but with the regular levy according to the green tax table for special remuneration. This scheme is temporary and applies under the conditions stated until December 31, 2025.

What is the starting date of the relaxation?

The intended effective date of the bill was January 1, 2021. However, the Senate only adopted the bill on January 12, 2021. As a result, there was no RVU threshold exemption on January 1, 2021. The bill does have retroactive effect to 1 January 2021.

What are the conditions for the RVU threshold exemption?

the benefit must be paid within 3 years before the employee's state pension age;
the amount of the threshold exemption is calculated per month and is equal to the net AOW benefit. The AOW amounts are adjusted annually.

What does the new system mean for my accrued pension?

The aim of the Pension Agreement is to keep accrued and future pension rights together. A standard transition path is prescribed in which existing rights are in principle converted to the new system. This is called “entering”. However, entering is not automatic.

The board of a pension fund can, at a request from the social partners, a professional pension association or the employer, decide to enter accrued rights into the new system. If a board wants to deviate from the standard transition path by not entering, the board must motivate this. For example because this would lead to a disproportionate disadvantage for (part of) the stakeholders.

Could the new system be disadvantageous for me?

Yes. However, that strongly depends on your age, the content of your pension scheme and whether you change jobs. The basic principle of the Pension Agreement is that people do not lose out. If this is the case, adequate compensation must be provided. In front of De Unie this is one of the most important points that still needs to be properly arranged.

Are you building up pension in a defined contribution scheme? Then you keep your current increasing premium tier. However, it will be unfavorable for employees over 45 to change jobs. Adjustments may still take place on this point.

How is an estimate made of your pension?

Every year it is determined:

how much money is in your pension pot
how the economy is expected to perform in the coming years
the average age people become, because the longer people live, the longer people receive a pension

The pension fund converts your pension pot every year into a pension that you can expect. Because the amount in your pot varies, the outcome of that calculation also goes up or down every year. The estimate of your pension therefore fluctuates every year.

How do I accrue pension in the new system?

Many people now have to deal with the so-called average contribution system. Everyone pays the same percentage of the pension base in contributions and receives the same percentage of pension accrual. However, as you get older, the price of pension increases. In fact, this means that there is a subsidy from young to old. This is about to change.

In the new system, young people will receive more pension accrual for the same premium, the elderly less.

Your pension will continue to evolve with the development of the economy. There will be no more hard commitments. To avoid major outliers in year-to-year payments, both positive and negative returns will be spread over several years.

Will the changes take effect immediately?

No, there is still a lot to be done to enable application. Social partners must make new agreements about pension schemes. Pension funds and insurers have to adjust their systems. That is why a transition period is foreseen until 1 January 2026. If the parties agree, it is possible to switch to the new system before 2026.

Why did new agreements about pensions have to be made?

The vast majority of people accrue pension in a system based on firm long-term commitments. As a result of the changed labor market, the declining interest rates for many years and the fact that we are living (on average) longer and that meant that these hard commitments could no longer be fulfilled. Pension has become increasingly expensive. More and more must be saved for less pension accrual, little or no indexation and even reductions in pensions. The limit of what is possible and acceptable has been reached.

Is my employer obliged to make a pension plan for me?

No. According to the law, your employer is not obliged to make a pension scheme for you and your colleagues, unless collective agreements have been made about this. Your employer is obliged to offer you a pension scheme if this is included in your collective labor agreement (CLA), or if your employer falls within a sector with a collective industry-wide pension fund. In the case of a collective labor agreement, please note that it has been declared binding by the Minister of Social Affairs and Employment.

Can I save for a higher pension myself?

Yes. You can save yourself in various ways for a higher pension, or to supplement your pension. And in addition to saving on a bank account, it is also possible to save in a tax-friendly manner via an annuity insurance or a bank savings product. Building up (extra) pension is very sensible in a number of situations.

Where can I find information about my accrued pension?

All information about your accrued pension can be found in a pension overview https://www.mijnpensioenoverzicht.nl/. Here you can check how much AOW and pension you have accrued, and what your attainable pension is. You can also consult your current Uniform Pension Overview (UPO).

What is a UPO?

A UPO stands for Uniform Pension Overview and gives you an update about your pension every year. You will of course only receive this overview if you participate in a pension scheme. On the overview you can check what amount you can expect when you retire or if you become incapacitated for work, for example. Have you accrued pension with multiple employers? Then you will also receive multiple UPS.

Where can I check whether I have accrued pension in the past?

You can first log in with your DigiD on https://www.mijnpensioenoverzicht.nl/. Here you will find an overview of everything about your pension. However, this information may not have been updated yet, or it may be incomplete. Therefore there is an alternative. You can contact the Pension Register Service Desk if you do not know whether you have accrued pension with employers in the past.

What is value transfer?

Value transfer of your pension is the 'transfer' of your pension accrual − and the associated pension rights − from your former employer and former pension administrator to a new employer and pension administrator. If you continue to work in the same industry, the pension provider, the pension fund, may remain the same. Value transfer is then not an issue.

Is value transfer sensible?

Whether value transfer is wise depends on a number of factors. It is important to make a comparison between the old and the new pension scheme. If your new plan is a final pay plan, value transfer may be sensible. Especially if you expect to make a career with your new employer. If your new employer has a defined contribution pension scheme, transfer may be unwise. Transfer can cost you or your next of kin a lot of money.

What is the coverage ratio of a pension fund?

The funding ratio of a pension fund indicates the extent to which the pension fund is considered able to meet its payment obligations now and in the future. A pension fund is funded through a funded system. This means that employees pay pension contributions during their employment. These contributions are then invested by the pension fund, so that all pensions can be paid with these proceeds.