Home Blog Pension choices

Choice guidance: This is how you help your employees with pension choices

3 min reading time

As an employer, you are expected to properly inform your employees about the content of the pension scheme and the choices they can make. With the advent of the Future Pensions Act (WTP), your role in this has become even more important. Not only you, but also the pension administrator has been given greater responsibility in this. Choice guidance is therefore an essential part of the pension scheme.

Choice guidance comes in different forms and has various responsibilities. What is always important is that you have a clear plan for how you want to set up this guidance.

What is choice guidance?

Choice guidance simply means that you support employees who participate in a pension scheme in making choices. Some of the key choices include:

Additional savings

Many pension schemes do not make use of the maximum fiscal scope for pension accrual. Employees can then often make extra payments to increase their pension.

Retirement date

Employees can choose to bring forward or postpone their retirement date. This affects the amount of the benefit.

Extra Coverage

In some schemes, it is possible to add additional insurance or extend existing coverage, such as the ANW gap insurance that offers extra benefits to the partner in the event of death.

Investment

Employees can opt for more or less risky investments, which has an effect on the final pension capital and the benefit.

Lump sum payment

Employees will soon be able to have a maximum of 10% of their pension capital paid out in a lump sum on the retirement date. This may seem appealing, but may have consequences for rent and healthcare allowance, for example.

Variants in benefit

At the start of the pension benefit, employees can opt for a higher benefit in the first few years or later.

Not every employee actively explores these options, which is why choice guidance is so important. If the pension benefit is disappointing due to the lack of choices or wrong choices, the first glance often falls on you as an employer.

Although pension administrators do offer some guidance through their portals, this information does not always reach employees. About 60% of the participants never look at the portal. Moreover, pension administrators only have insight into the schemes that are in place with them. Employees who have had multiple employers during their careers often also have schemes with different pension providers that are not transparent to every provider.

Action

All the more reason to take action as an employer and take control of your own affairs. By actively informing employees, for example through an advisor, you ensure that the information does reach them. Think of a presentation, walk-in consultation hour or personal conversations.

At Alpina Pensioen, we are at your service with experienced advisors throughout the country. There is always an advisor nearby to help you with choice guidance.