Dutch pension legislation is changing at a rapid pace. Pension accrual was already reduced with effect from January 1, 2014 and is expected to be reduced further as of January 1, 2015. Furthermore, works councils’ co-determination rights on pensions will be explained in greater detail. In this alert we have summarized the key changes for your HR practice.

New amendments to tax law  

Recently, a legislative bill was submitted providing for further adjustment of the tax frameworks governing pension accrual with effect from January 1, 2015. The bill proposes the following:

  • reduction of the maximum tax-deductible accrual rate: 1.875 percent (currently 2.15 percent) for average salary and 1.657 percent (currently 1.9 percent) for final salary pension plans, at a standard retirement age of 67. The graduated scales of defined contributions will be revised accordingly;
  • capping of pensionable income at EUR 100,000; and
  • introduction of net annuities for pensionable income exceeding EUR 100,000.

Besides a reduction of the retirement pension, these measures will also cause potentially substantial reduction surviving dependents' pension and the occupational disability pension.

We advise you to identify and list the consequences of these amendments for your pension plans.

Co-determination rights on pension plans

Works councils’ co-determination rights on pension plans will be simplified and clarified this fall. The works council’s consent will be required for every proposed decision to adopt, amend or withdraw a pension plan, irrespective of the type of pension administrator. No consent will be required for pension plans administered by a mandatory industry-wide pension fund or for the execution agreement. However, the works council will have the right to be consulted on the execution agreement with the pension insurer.