Pension compensation scheme: what does it entail and what do you as an employer need to arrange?

With the transition to the Wet toekomst pensioenen (Future of Pensions Act), some of your employees will lose out on pension accrual. The compensatieregeling (compensation scheme) is designed to address that. As an employer, you need to make an active choice here — there's no one-size-fits-all solution.

In this article, you'll read what the compensatieregeling entails, who's entitled to it, and what options you have as an employer.

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What is the compensatieregeling pensioen (pension compensation scheme)?

The compensatieregeling pensioen is a measure employers can put in place to compensate employees for pension loss during the transition to the Wtp. Under the new system, every employee pays the same premium, regardless of age. That sounds fair, but it works out unfavourably for older employees.

Under the old system, premium contributions rose in line with the employee's age. Older employees therefore built up more than younger colleagues. With a vlakke premie (flat premium), that advantage disappears. Anyone who switches to the new scheme at a later age builds up less than they would have under the old system. That difference is what the compensatieregeling tries to bridge. From roughly age 40 onwards, the switch to a flat premium can work out worse — but this varies per situation and scheme.

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Who is entitled to compensation?

Not every employee ends up worse off because of the Wtp. Younger employees actually benefit from the new scheme, because their contributions have more years to generate returns. It's primarily the older employees who are disadvantaged by the switch to a flat premium.

As an employer, you first map out which employees are worse off and by how much. That analysis forms the basis for the compensation choices you make afterwards. Without it, you don't know what to compensate or for whom.

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What options do you have as an employer?

There's no obligation to compensate in a specific way. The law prescribes that the transition must be evenwichtig (balanced), but leaves the specifics up to the employer. That gives you room, but also requires a deliberate assessment.

The most common options are a higher employer contribution for the affected employees, a one-off or periodic compensation payment, or a supplementary pension provision. Which option fits best depends on the makeup of your team, the financial room within your organisation, and the agreements you make with the medezeggenschap (employee representation).

One thing is certain: doing nothing is not an option. Employers who don't arrange a balanced transition risk legal claims from employees who can demonstrate they've been disproportionately disadvantaged.

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Eerbiedigende werking (grandfathering) as an alternative to compensation

Some employers opt for eerbiedigende werking as an alternative to compensation. In that case, only new employees move to the new scheme. Existing employees stay on the old scheme, including the age-dependent premium.

The upside is that you don't need to compensate anyone. The downside is that you end up running two schemes side by side. Employees in the same role then receive different pension contributions from you — which is difficult to explain and can cause friction.

Eerbiedigende werking is a legitimate choice, but not a simple one. It requires a deliberate assessment of what kind of employer you want to be and how you communicate that internally.

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How do you involve the medezeggenschap in the compensation decision?

The choices you make about compensation aren't just a financial decision. They directly affect your employees' employment terms. That means you need to involve the ondernemingsraad (works council), personeelsvertegenwoordiging (employee representative body), or trade unions in good time.

The medezeggenschap has instemmingsrecht (right of consent) when it comes to changes in the pension scheme. That also applies to the compensation arrangements. Document your choices in the transitieplan (transition plan) and discuss the plan with the medezeggenschap before you make final decisions.

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When does the compensatieregeling need to be sorted?

The transitieplan, including the compensation arrangements, needs to be ready by October 1, 2027 at the latest. That's the interim deadline for providers to technically implement everything before the final date of January 1, 2028.

If you postpone the compensation choices, you risk not having enough time for a careful assessment and alignment with the medezeggenschap. A compensatieregeling put together under time pressure is rarely the best solution for your employees.

So start early. Analysing who's worse off, choosing the form of compensation, and aligning with the medezeggenschap takes more time than you'd expect.

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Pension as a chance to show what you're worth

The compensatieregeling feels like an extra burden on top of an already complex transition for many employers. But there's another side to it. Employers who compensate their employees fairly and communicate openly about it build trust. That's exactly what a healthy employment relationship demands.

Through the Vive app, employees can see directly after the transition what they're building up and what the changes mean for their personal situation. That makes compensation tangible and understandable — for you as an employer and for your team.

Vive also offers a third option alongside compensation and eerbiedigende werking. You move all employees to an equal flat premium and only compensate the employees who are worse off through a derdepijlerregeling (third-pillar scheme) at Vive, outside the tweede pijler (second pillar). That way, you flexibly make up for the missed staffelinleg (age-graded premium contribution).

Is your current second-pillar contract expiring soon? Then you can also choose to switch fully to Vive and set up your pension scheme flexibly. Previously accumulated assets won't transfer, but from that point on, you arrange everything with us.

[Read more about pension for employees]