Changes to pension legislation as of January 1, 2015
As of January 1, 2015, new pension legislation applies. These further limit the accruement of pension. In addition, the pensionable salary is maximised. The implementation of these changes has now been completed. Have you taken the right measures for your company?The developments in the field of pension require more and more from the employer with respect to communication with his employees. We discuss a number of important changes to the pension agreement 2015 and possible solutions in this article.
Reduced accrual rates for benefits contracts and available defined contributions
From 1 January 2015, your employee may accrue pension on 75% of the average wage. This was 70% of the final salary. This means that your employee can build up less pension per year: the "maximum accrual rate per employment year" for a benefits contract changes. The maximum percentage for an average salary scheme is 1.875% (previously 2.15%) and a final salary scheme 1.657% (previously 1.9%). The maximum rates for defined contribution schemes were also reduced.
Net table decision (2009)
This decision means that all defined contribution schemes on 1 January 2015 should be based on net available premium tables. This means that all costs (including administrative costs and fees) and premiums for contribution exemptions in case of disability and survivors' benefits may no longer be paid from the premium calculated based on the contribution table. With this introduction, the government aims to increase transparency and lower costs.
Maximum pensionable salary
With effect from 1 January 2015, your employees with a gross salary of more than € 100,000,- no longer accrue pension on the amount above € 100,000,- in the pension plan of your business. This also applies to the benefits of surviving dependants if your employee passes away, but not for the pension which the employee would receive if he becomes incapacitated.
What do these changes mean for you as an employer?
The reduced pension accruement will often lead to a lower contribution burden. You can see this as a nice windfall for your business, but keep in mind that a lower pension also means deteriorated working conditions. You can choose to offer compensatory measures to your employees, for example:
- Lowering the employee's premium.
- Expanding pensionable salary elements (for example, a variable salary).
- Promising of a gross contribution or bonus.
- Assigning a flexible budget, which for example can be used for extra salary or extra vacation days.
- Offering a scheme for incomes above € 100,000,- gross.
Compensation scheme above the income of € 100,000,-
If your employee individually arranges additional dependants coverage, chances are that he or she must be inspected and might not be accepted and/or only be accepted at higher costs. You can offer your employees with incomes above € 100,000,- a beneficial arrangement through Schouten Zekerheid. You decide how the costs are shared between employer and employee. Your employees have the possibility to forgo participation.There are two ways of doing this:
- A one-time net benefit payment to the partner if the employee dies. This amount can be used to supplement the income or to repay the mortgage on the house.
- Net lifelong monthly benefit payments to the partner of the employee. There is as little difference as possible with the current coverage.
The pension specialists of Schouten Zekerheid are happy to advise you on and help you with setting up such an arrangement.
Besides the financial implications, the changes in pension legislation also result in additional administrative work. You can think of arranging the payroll, equivalence statements for the pension fund, adjusting legal documents and labour and pension agreements with your employees.All adjustments to the pension agreement and thus changes to working conditions also mean that you need the permission of your employees. If the pension plan has been made mandatory by a collective labour agreement (CLA), you do not need this permission.