Flexible pensions are slowly gaining ground among employers

More and more employers are allowing their employees to build up a flexible, individual pension alongside their collective pension scheme, giving employees control over how it is managed. Over the past year, asset manager Vive saw five large employers, representing nearly 1,000 employees, opt for this approach. Together, they accumulated more than €1 million in assets in a single year. This trend coincides with the introduction of the Dutch Future of Pensions Act (Wet toekomst pensioenen, Wtp), which gives every employee their own pension pot, making pensions more visible and personal.

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From a collective promise to a personal pot

For a long time, the Dutch pension system offered employees little freedom of choice. The employer determined the scheme, while the employee had very little insight into or control over it. Under the Wtp, which came into force on 1 July 2023, every employee receives their own pension pot, whose value moves in line with investment performance. Pension providers have until 1 January 2028 to make the transition; the first funds switched in early 2025, followed by a larger group in early 2026.

This shift creates more scope for personal control. In the third and fourth pension pillars, on top of the collective scheme, employees can make additional contributions, adjust their goals, take more or less risk, and take their accumulated assets with them when moving to a new job or abroad. Vive administers such schemes for employers.

“For decades, a pension was something arranged for you, without you having any real visibility of it,” says Alexander Brouwer, founder of Vive. “The system asked very little of you. But now that everyone is getting their own pot, it is becoming something they need to engage with themselves.”

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More control requires greater understanding

The shift touches on a broader issue. Some working people do not build up any supplementary pension at all. At the end of 2023, this applied to 680,000 employees, more than 9% of the total. The Wtp stipulates that this pension coverage gap should be halved by the end of 2027 compared with 2019. For this group in particular, a flexible and accessible scheme can provide a first step, as employers and employees decide whether contributions are made and, if so, how much.

At the same time, greater freedom of choice requires more guidance. The collective system provided a safety net for people who did not take an active interest in their pension; that safety net is becoming smaller.

“You cannot simply give people their own pot and expect everything to work out,” says Brouwer. “They need to be able to see what they are building up, understand the choices available to them and know where to go if they have a question. Otherwise, it remains a pot that nobody pays attention to.”

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Employers are looking beyond salary

For employers, this development goes beyond pensions alone. In a tight labour market, pensions have become an employee benefit that companies can use to distinguish themselves, alongside salary and other benefits. The fact that the assets remain with the employee, even after they leave, makes the scheme more a sign of being a good employer than a means of tying employees to the company on paper.

Each employer structures the scheme in its own way, for example by making it available once an employee works a certain number of hours or has a permanent contract.

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Still in its early stages, but gaining momentum

Vive expects interest to continue growing as more employers redesign their schemes under the Wtp and financial advisers play a greater role in shaping companies’ employee benefits.

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About Vive

Vive is an asset manager that brings pensions and investments together in a single app. The company offers employers, entrepreneurs and individuals a flexible, personal way to build up assets for retirement and other goals. Vive is supervised by the Dutch Authority for the Financial Markets (AFM) and De Nederlandsche Bank (DNB), the Dutch central bank.