In brief

After many years of negotiations between social partners and the Dutch government, the Dutch Minister of Social Affairs finally submitted the legislative proposal for Dutch pension reforms to the House of Representatives in March 2022. The proposed legislation aims - amongst others - to abolish defined benefit schemes and to prescribe flat rates for defined contribution schemes. Since the preparation of legislation took more time than expected, the initial aimed implementation date of 1 January 2022 was already postponed to 1 January 2023 (with a transition period up to and including 2026). However, since the legislative proposal triggered many questions amongst the House of Representatives during the past few months, the Dutch Minister of Social Affairs has recently concluded that an implementation date of 1 January 2023 is not realistic anymore. Therefore, the Minister postponed the aimed implementation date again: to 1 July 2023.

Consequences of the postponement

  • The effective date of the pension reforms will be postponed from 1 January 2023 to 1 July 2023.
  • The ultimate date of the transition period will remain 31 December 2026.
  • For the time being, the relaxation of pension reduction rules for pension funds will only apply for 2022. This means that pension reductions will only be required in case of a coverage ratio below 90%. Whether the relaxation will be extended to 2023 is unknown yet.
  • Earlier this year, the indexation limitations for pension funds (no indexation if the coverage ratio is below 110%) have been relaxed; subject to certain conditions indexation is possible with a coverage ratio of at least 105% in 2022. Whether the relaxation will be extended to 2023 will be subject to whether the legislation proposal will be passed by the House of Representatives.
  • Postponement of the pension reforms does not prevent employers to already amend their pension schemes. All the more so since the ultimate date of the transition period will not be postponed.

Recommended actions

  • Identify whether the applicable pension schemes need to be amended due to the proposed pension reforms.
  • Identify the applicable consultation requirements and consultation bodies.
  • Already start preparations for pension scheme redesign.
  • Consider the pension reforms in any current salary planning, benefits harmonization, pension scheme redesign or pension contract renewal.

For a more schematic representation of the obligations of an employer and possible steps to be taken under the proposed legislation, please be referred to the attached overview of relevant deadlines for employers and flow chart.