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Article | Global News Briefs

Netherlands: Lower House approves amended pension reform bill

By Wichert Hoekert and Willem Eikelboom | December 30, 2022

In a major overhaul of the Netherlands pension system, the proposed Future of Pensions Act would require all existing pension plans to be amended between July 1, 2023 and January 1, 2027, to comply with certain requirements.
Retirement|Health and Benefits|Ukupne nagrade

Employer Action Code: Act

On December 22, 2022, the Lower House of Parliament passed the Future of Pensions Act (Wet Toekomst Pensioenen – WTP) by a large majority after a lengthy and intensive debate in which the law was amended on several important points. The WTP is the formal legislation to implement the agreement reached in 2019 between the government and social partners on a major reform of the occupational pension system. The bill will be taken up by the Senate in January 2023 and, based on the Senate’s current makeup, is expected to pass.

Key details

Significant amendments include:

  • The maximum starting age for pension accrual in an employer plan will be reduced to 18 (from 21).
  • The early retirement bridging pension arrangement option for blue collar workers will be extended beyond 2025.
  • Under certain conditions, pension benefit reductions that would normally be required based on the plan funding ratio at the end of 2022 will not be required.
  • The possibilities for pension indexation that have applied in 2022 (and have been used widely, in particular by large industry-wide plans) will also apply in 2023.

Employer implications

If the WTP becomes law in its current form, all existing pension plans will have to be amended between July 1, 2023 and January 1, 2027, to comply with the requirement, among others, that new accruals be on a defined contribution basis and with contribution rates independent of age (with limited exceptions for certain current employees). By January 1, 2025, pension funds must complete a transition plan to the new type of arrangement; for other types of plans, this deadline does not apply, and in many cases the transition to the new arrangement will coincide with the ending of a current insurance contract period.

Employers and employee representatives will determine the features of the new arrangement, the transition timing and any required compensation to employees who experience lower pension accruals (if these aren’t offset by other aspects of the changes). Though the government assumes that compensation will be in terms of pension accrual rates, the WTP also allows other forms of compensation; therefore, it is advisable to consider such compensation from a broader rewards perspective.


Wichert Hoekert


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