Pension schemes

Pension schemes must broadly meet the following conditions to deduct premiums from your employee’s gross salary:

• Your pension scheme may make provisions (virtually) solely for:
  • a lifelong old-age pension for the employee
    This is based on the principle that the employee retires on reaching age 68. The employee may take early retirement, although the pension benefits will then need to be recalculated. The employee will then receive a lower pension benefit. A recalculation is not required if the pension starts on the 1st day of the month in which the employee becomes 68. Completely advancing the pension can only be done when the employee stops working entirely on that exact date. If the employee only stops partially then the pension can only be advanced partially. There is one exemption: an employee can completely advance the pension in the 10 years before he reaches state pension age, even when the employee works only partially.
  • a partner pension that on the employee's death is paid to the employee's (former) spouse or (former) partner with whom the employee ran a joint household
    Partner pension can start on the first day of the month in which the employee has passed away.
  • an orphan's pension that on the employee's death is paid to the employee's children or foster children below the age of 30
    Orphan's pension can start on the first day of the month in which the employee has passed away.
  • an occupational disability pension that is reasonable according to generally accepted views and which is paid once the period of the employee's occupational disability exceeds 1 year
  • a survivors' bridging pension which can be paid alongside the partner pension until the partner reaches state pension age to compensate for the lack of General Surviving Relatives Act (Anw) / General Old Age Pensions Act (AOW) benefits – if these pension benefits commence immediately after the death of the employee or after the end of the Anw benefit
    The a survivors' bridging pension can also be paid alongside the orphan's pension.
• The scheme must include provisions including the provision that your employee may not redeem, alienate, pledge or waive the pension rights unless so permitted pursuant to the provisions of the Pension Act.
• The pension must be insured with an insurance company specified in the law. See below under 'Recognised pension insurer'.
• The pension must, on the basis of the retirement age, remain within statutory limits including the following:
  • With an average salary pension scheme the old age pension is accrued at a rate of a maximum of 1.875% of the pensionable wage for each year's service and with a final salary pension scheme at a rate of a maximum 1.657%.
  • A different accrual method is applicable to defined contribution pension schemes: the annual contribution to be paid is then determined, rather than the above annual accrual rate.
• All the aforementioned limits are determined inclusive of the State old-age pension (AOW) benefit (usually inclusive of what is referred to as the State pension (AOW) offset). In addition to this collective – mandatory – pension scheme, the scheme may – within the aforementioned limits – encompass individual modules from which the employee may make a selection.
• Your employee may, for as long as he or she is employed, also accrue pension during parental, sabbatical, study or care leave.
• Your employee may also convert the partner pension into a higher or earlier old-age pension, and vice versa.
• The effective date of the pension may be postponed until 5 years after reaching the state pensionable age. The employee is not required to have been in employment for this specific period of 5 years.
• Variable payments of pension benefits are permitted within the ratio 100:75. In the case of variable payment, the amount of the variation and the period in which the benefits vary in amount must be fixed at the latest when the benefits commence.
• Apart from the 100:75 variability, the pension benefits may also vary with a value that equals twice the benefits applicable to married persons in these years without supplement as described in article 9, paragraph 1, sub-paragraph b, and paragraph 5 of the General Old Age Pensions Act, plus holiday allowance.
• The value of the pension benefits may also vary compared to the value at the time of the effective date of the pension. This is due to the expected increase of life expectancy, the mortality results or the achieved investment results.
• Effective 1 January 2024, the pensionable salary may not exceed €137,800. You can offer the net pension (see below under 'Net pension') for employees who earn more than this amount. The amount of €137,800 is reduced proportionately for employees who work part-time.

Recognised pension insurer

The following can act as a pension insurer:

• a pension fund
• an insurance company as referred to in Article 1:1 of the Financial Supervision Act
  The insurance company must recognise the pension commitments in the national business assets for corporate income tax purposes.
• a premium pension institution
• an organisation which is not established in the Netherlands and meets 1 of the following conditions:
  • The organisation is designated by the Minister.
  • The organisation had already insured the pension during a period in which the employee or former employee had not lived or worked in the Netherlands and thereafter continued this pension insurance with this same pension insurer.

Net pension

The pensionable salary may not exceed €137,800 as from 1 January 2024. Your employee will not be able to accrue any 'normal' pension above this amount with application of the reversal rule. However, your employee will be able to accrue net pension for his or her income over and above €137,800. This net pension must be saved for from the net salary. Net pension can only be saved for in the form of an available contribution scheme. The net scales were published in Appendix VII to the Policy Decision of 26 June 2023, no 2023-13825, changed in the decision of 13 September 2023, no 2023-20266.

The net scales were published in Appendix VII to the Policy Decision of 20 December 2019, no 2019-21333.

Designation of pension scheme

If you have a pension scheme that does not meet the conditions attached to pension schemes in full then the Minister of Finance and the Minister of Social Affairs and Employment may still, subject to certain conditions, designate the scheme as a pension scheme. You can submit an application for the designation of a scheme as a pension scheme to:
Ministry of Finance
PO Box 20201
2500 EE The Hague
The Netherlands

State pensionable age (AOW) and retirement age

On 1 January 2024, the pensionable age for national old-age benefits is the age of 67.