From 1 July 2023 the Future of Pensions Act comes into force. Pension providers have until 1 January 2028 to adjust their pension schemes.
Transition plan
Employers are obliged to prepare a transition plan (or have one prepared) if they have a pension agreement with their employees on 30 June 2023 and do not avail themselves of transitional law. An age-related graduated scale may still be applied for existing participants under transitional law.
The transition plan is the basis for the transition. It provides details on issues including the pension scheme opted for, the reasons for this decision and the consequences for participants’ pensions. The plan will be sent along with the request for consent to amend the pension agreement to the works council and/or employee representatives.
Implementation plan
In the implementation plan, the pension provider explains the preparations and time needed for the execution of the new pension scheme. This plan also states how the new pension scheme will be executed. The pension provider discusses, among other things, the technical practicability, costs and risks of executing the pension scheme and the risk management measures taken.The obligation to draw up an implementation plan does not apply in the case of non-retroactive effect of a contribution scheme with age-related graduated scales.
Communication plan
A communication plan is part of the implementation plan. The communication plan informs participants about changes and offers them the possibility to request a copy of the pension scheme rules.In addition, the pension provider must explain to participants, former participants, former partners and pensioners how the transition will affect their pensions.
How we will help you during the transition period
It is important that advisers, employers and participants know in good time how the transition to the new pension scheme may affect them. After all, there must be sufficient time to obtain individual participants’ consent, if necessary to be preceded by guiding talks to be held with the works council and/or employee representatives. The transition from an average pay scheme to a defined contribution scheme, for example, is a big change. What will happen to the pension capital? And what choices will participants have for their income in the future? We are happy to help make the consequences clear to employers and participants alike.
Participants’ interests take priority in the transition to a new pension scheme. We will explain the differences between the old scheme and the new scheme. And participants will receive all the information they need to make the right choices in the new scheme. There will also be a tool for advisers to make their own calculations. Information about this will be made available at a later date.
Compensation
Our common goal in the transition to a new pension scheme is, of course, that participants will not be worse off than they were under the previous scheme. Does the calculation show that a participant will have less (expected) pension capital because of the transition? They may be compensated for this until 1 January 2037, i.e. until at most 13,5 years from 1 July 2023 and 10 years from 2027.
Zwitserleven will offer the possibility to settle the compensation in the form of pension. We are still working out the details.
Employers may also offer compensation through wage payment. Does the employer offer PensioenAanvullen (supplementary pension) and does the participant have sufficient tax allowance? In that case, the participant may use it for additional pension accrual through PensioenAanvullen, for example.
Effective date for new and existing pension schemes
- If an employer concludes a pension scheme for the first time on or after 1 July 2023, this scheme must comply with the new Act straight away.
- As for existing pension schemes, employers must switch to a compliant pension scheme by 1 January 2028 at the latest.
Pension schemes offered by Zwitserleven (PPI)
Zwitserleven will continue to offer DB schemes in 2023 as well. This applies to renewals and to new contracts. Contracts will end on 31 December 2026 at the latest.
We are adapting our Exclusief Pensioen and Nu Pensioen products to meet the requirements of the new Act before 1 Juy 2023.
More information about the changes and timelines applicable to the Netto Pensioen product will follow at a later date.