Pension schemes for your employees, a step-by-step plan

In certain business sectors, companies have to offer their employees a pension. This is called a compulsory sector pension fund or bpf (bedrijfstakpensioenfonds). Contact the Ministry of Social Affairs and Employment (SZW) or check their website (in Dutch) to find out if this is true for your company. If so, you have to offer your employees a pension scheme within this pension fund.

You run a financial risk if you fail to do so. You may receive a notification that you have to join and register your employees with retroactive effect. You must then also pay overdue pension contributions. This may have consequences for your private assets.

Exemption (compulsory) pension fund

Do you not want to participate in the (compulsory) pension fund? Then you can ask permission for this from the board of the bpf. If you receive permission, you choose a pension scheme for yourself and your employees.

Occupational pension schemes exist for some occupational groups. Participation is often mandatory. For example for notaries, healthcare professions and professions in the harbour. Read which professions have a mandatory pension fund (in Dutch).

Do you yourself fall under an occupational pension scheme? Then the pension scheme does not apply to your employees. You must offer your employees a different pension scheme (beroepspensioenregelingen, bpr). For example, if you are a pharmacist, you will fall under the fund for pharmacists. But your employees have to be covered by the pension fund for pharmacy employees.

Even if your industry does not have an industry-wide pension fund, you are sometimes obliged to arrange a pension. That will then be stated in the collective labour agreement (CAO). Whether the collective labour agreement is mandatory depends on your membership of an employers' or professional association. The CAO is also mandatory if the Ministry of Social Affairs and Employment (SZW) has declared it generally binding for your industry. Read more here about whether a CAO applies to you (in Dutch)

Is there no compulsory pension scheme for you and your employees? Then you can decide whether you want to offer a pension and what the pension scheme looks like.

For example:

• you can set up a company pension fund;
• you join a general pension fund;
• you take out pension insurance with a pension insurer.

You can ask advice from an independent financial adviser. You can also find information about the execution of pension schemes at AFM, the Netherlands Authority for the Financial Markets (in Dutch).

Each employee is required to pay a personal contribution. Does your company fall under a compulsory pension scheme? Then the maximum personal contribution is stated in the pension scheme or the collective agreement. Less is allowed, more is not.

Information about pensions usually goes through a pension administrator. This can be the pension fund or the pension insurer. But you also have to inform your staff about certain matters. This is called duty of care (zorgplicht).

You must:

• inform your employee within one month of starting work whether they will participate in a pension scheme;
• let them know how soon an offer will be made and who the pension administrator is;
• inform the pension provider when the employee starts and what pension agreements have been made with the employee.

The pension provider then informs the employee about the characteristics of the scheme. And about situations that require an action from your employee. For example:

• opportunities to accrue extra pension.
• the option to transfer accrued pension to the new pension scheme.
• the possibility to continue the pension scheme if the employee starts their own company.

Are you required to offer your employees a pension plan? Then register your employees on time. If you fail to do so, you may be fined.

You also have a payment obligation. You can often make good agreements with your pension fund about the how and when you make your payments. But if you fail to pay, the pension fund can take substantial measures to safeguard pensions, sometimes with retroactive effect. You can be liable with your private assets as long as you do not pay. Do you have trouble paying? Always report payment problems to your pension fund and look for a solution together.

A pension scheme is a condition of employment. You cannot simply change it without your employees' permission. Is your pension scheme administered by a pension fund and would you like to change it? Then your business's works council must agree to this.

Sometimes there is a provision in the pension scheme or CAO that one-sided adjustment is allowed, but only in serious circumstances. For example, if your company is in danger of going bankrupt. Or because the legislation or the CAO changes. You must then inform your employees with a proposed amendment.

• The Social and Economic Council of the Netherlands (SER) has devised a step-by-step plan for offering your employees a pension scheme.
• All pension funds must report to De Nederlandsche Bank (DNB) after incorporation. The pension funds are listed in DNB's register for pension funds.
• See the overview (in Dutch) of general, company, occupational and industry pension funds on the website of the Pension Federation.
• Employers' and employees' organisations or the pension fund can tell you more about the pension scheme that has been taken out.
• Salary offices know how mandatory industry and occupational pension funds work. And they know about the wage tax return and uniform pension tax return.
• Talk to other business owners about pensions on the entrepreneurs' forum Higherlevel.nl.
• Download the KVK Book of Finance (pdf).