When is the transition to the new pension system?

The Future Pensions Act (WTP) will significantly change the Dutch pension system. The transition must be completed by January 1, 2028, at the latest, but when does the new pension system truly come into effect for you as an employer? And when do you need to start? For many companies, that date is sooner than expected.

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What's changing with the new pension system?

The most significant change is the shift to a defined contribution scheme with a flat-rate premium. For new pension schemes, an age-independent premium applies, meaning young and old receive the same premium percentage. The current age-dependent scales will disappear for new schemes.

Furthermore, pensions will become more personalized. Each employee builds up their own pension assets, which are directly transparent. These assets fluctuate with investment results, meaning pensions can rise faster but also fall. The fixed promise of a guaranteed amount is replaced by greater transparency and flexibility.
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When do you need to transition?

The official end date of the transition period is January 1, 2028. By that date, all pension schemes must comply with the new legislation. However, that doesn't mean you can wait until 2028 to take action.

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Why employers should start now

Implementing a new pension scheme typically takes 6 to 18 months. This is because it involves multiple steps: making choices about the scheme, drawing up a transition plan, obtaining consent from the works council or employees, and allowing the administrator time for administration and communication. For many employers, the real deadline therefore starts as early as 2026 or 2027. Those who only start now risk getting into a bind.

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The deadline for the transition plan

For employers with a scheme through an insurer or PPI, October 1, 2027, often serves as the practical deadline for the transition plan. Administrators then need time to implement the changes. The exact date may vary per administrator, so check with your own pension provider.

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What do you need to arrange as an employer?

The transition to the new system requires multiple choices and actions.

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Choices regarding the scheme

You decide which type of defined contribution scheme you want to offer, whether you apply grandfathering for existing participants, and how you will handle compensation for older employees who are disadvantaged by the flat-rate premium.

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Employee Consent

Pension is an employment benefit. A change usually requires the consent of the works council, employee representation, or individual employees. Different rules apply to collective labor agreement (CLA) schemes. This process takes time and requires clear communication.

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Communication to Your Team

The new system is difficult for many employees to understand. As an employer, you are responsible for clearly explaining what is changing and what that means for their pension accrual. Good communication prevents unrest and questions later on.

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What if you're too late?

Employers who miss the deadline risk legal and tax problems. A pension scheme that does not comply with the WTP can be declared invalid or result in unfavorable tax consequences. Furthermore, it can damage relationships with employees if they are unexpectedly confronted with changes. Although 2028 may seem far away, many employers are already behind if they are only just starting now. It pays to start on time and establish a clear timeline.

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Have you reached the end of this blog and want more information about the other options available for arranging pensions for your team? Then check out the brochure for SME employers.

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