What is a non-collective pension? The new pension

Why employers are opting for the ‘new’ pension

For years, pensions were something abstract. Contributions were paid in every month, but exactly what you were accruing remained unclear to many employees. That is changing. Modern employees expect the same transparency from their pension as they do from their bank account or investment app. More and more employers are responding to this with a more personalised form of pension accrual, such as an employer-sponsored annuity. But what exactly does that involve?‍

‍

What is an employer-sponsored annuity?

An employer-sponsored annuity is a scheme whereby the employer contributes to a personal annuity account in the employee’s name. Unlike with a traditional pension fund, you do not accrue an abstract entitlement, but rather visible assets in your own account. That account remains yours, even if you change jobs.

For tax purposes, an annuity falls under the third pillar rather than the second pillar, as a pension fund does. Depending on the structure and your available annual allowance, the contributions may offer tax benefits. With Vive, you can see exactly what you’ve built up via the app and choose from different risk profiles.‍

‍

Why do employers opt for this?

The labour market has changed. People no longer stay with the same employer for thirty years. They change jobs more often, work temporarily as self-employed people or combine different sources of income. A personal pension pot is a better fit for this than a group scheme based on long-term employment.

Employer branding also plays a role. A pension is no longer something that is simply ‘sorted’ and then forgotten about. Employees actively compare employment conditions and value transparency. A modern pension scheme offering ongoing insight feels more innovative and personalised than an annual letter containing abstract figures (such as the UPO or what you see on mijnpensioenoverzicht.nl).‍

‍

The difference from a traditional pension

With a collective pension fund, you and your colleagues pay in contributions and share the risks. This has advantages, such as collective risk-sharing and professional management. But there are also disadvantages. You have less insight into exactly what belongs to you, and decisions are made centrally for all participants. With an employer-sponsored annuity through Vive, it’s different. You have your own account with your own capital. You can track your pension accrual via the app and don’t have to wait for an annual statement to see where you stand. Your employer pays directly into your account.‍

‍

How does it work at Vive?

At Vive, every employee opens their own personal pension account. The employer sets the contribution and pays it directly into the employee’s account. Via the app, the employee can see the contributions coming in, how their assets are growing and what their expected pension will be. No abstract promises, just concrete insight.

It’s easy for employers to set up. No complex pension administration is required, and employees can be registered within fifteen minutes. This makes it particularly attractive for SMEs without a mandatory pension fund, either as a supplement to or an alternative for a group scheme.

Group pensions are not going away and remain the foundation for many employees, but expectations regarding transparency and ownership are changing, and more and more employers are responding to this.‍Curious to find out what an employer-sponsored annuity looks like in practice? Take a look at the brochure for employers or read more about pensions for employees.

‍

Curious to find out what an employer-sponsored annuity looks like in practice? Take a look at the brochure for pensions for employees.

‍