Future Pensions Act Partner pension
The Law on the Future of Pensions (WTP), which entered into force on July 1, 2023, aims to reform the Dutch pension system and better align it with today's labor market. One of the important aspects of this law is its impact on partner pensions. To what extent has your company informed your employees about the changes in this area? Ron Mulder, Pension Expert at Alpina, is happy to tell you more about this topic.
Changes partner pension under the WTP
"Previously, the partner's pension was often based on the member's years of service. Under the WTP, this will be replaced by a standard insured partner's pension that amounts to a maximum of 50% of pensionable salary. This means that the amount of the partner's pension will depend directly on salary and no longer on years of service," Ron explains. "This is not more favorable for everyone; previously, a longer achievable period of service often resulted in a higher partner's pension. For shorter years of attainable service, the new system is often more favorable. It is important to inform your employees about the changes with targeted information for each target group. After all, the changes affect the younger target group differently compared to employees who have been with your company longer."
Each pension fund is going to use its own percentage for insuring the partner's pension. This new partner's pension is sometimes supplemented by a temporary survivor's bridging pension. But beware because with other pension funds, this temporary survivor's bridging pension will actually be cancelled.
Different implications for existing and new employees
"These changes obviously have different implications for existing and new employees. The pension entitlements accrued by existing employees before the introduction of the WTP are mostly retained. This means that for this group there will be no changes to the pension entitlements that have already been acquired.
Employers and pension funds may choose to honor old partner pension rights for existing employees. As a result, accrued pension rights often remain unchanged. For new employees, the new system applies immediately from the entry into force of the WTP.
Pension through employer
"In conclusion, the WTP has advantages and disadvantages. The new system offers more certainty and more uniform coverage, especially for those with varying employment relationships. However, participants with long tenures and high salaries may experience lower insured partner pensions in some cases. It is important for participants to be aware of these changes and possibly take additional measures, such as purchasing additional death risk insurance. Pension funds will actively inform participants about the changes and their impact on the partner's pension. I emphasize that it is also important for you as an employer to inform your employees. And at this point we are happy to provide advice!".
Want to know more about this topic?
Schedule an appointment with an Alpina retirement advisor or contact Ron directly at alpina.nl