Pension law is about the right to a pension. It is a broad field. The primary legislation with respect to pension law is recorded in the Pensions Act. Apart from the Pensions Act, there are a lot of additional regulations and legislation. Legislation, such as the Sectoral Pension Fund (Obligatory Membership) Act 2000 and the Equalization of Pension Rights in the Event of a Divorce Act. Moreover, there are many rulings with respect to pensions.
Naturally, the general law of obligations affects pension law as well.
Insurance law/administrative law
Pension law has overlap with insurance law in cases where the pension provider is an insurance company. If the pension provider is a sectoral pension fund, then administrative law comes into play. The pension fund is an independent administrative body if they make decisions regarding exemptions.
An important subarea in pension law concerns equal treatment. (Indirect) distinctions based on gender or age is prohibited with some exceptions. European law has major influence on this.
Pension providers have a large responsibility. This applies to both insurers and pension funds. This responsibility means that internal and external supervision is required, for which governance plays a major part. The external supervisor is De Nederlandsche Bank. They are a mandatory meeting partner when drawing up recovery plans, but also for the execution of recovery plans in relation to underfunding.
Pension law has many tax aspects, which means tax law is also included in handling issues in the field of pension law.
Social security law
Legislation in the field of social security influences the pension law specialisation. This concerns, for example, changes to the Work and Income (Capacity for Work) Act or increasing or extending the pensionable age. Pension providers have had to make changes to regulations due to this.
The laywers at JPR Advocaten provide advice to and conduct proceedings for employers with respect to a range of pension law matters.
At the request of social partners, the Minister of Social Affairs and Employment can made affiliation with a sectoral pension fund compulsory for an entire industry. However, it is not always clear if a specific company is part of a specific industry. In addition, the the scope clauses for a sectoral collective labour agreement are not always identical to those of a compulsory affiliation decree. It is still fairly common for an employer to find out that they are covered by a compulsory affiliation years after the fact.
The financial consequences thereof can be significant, and we attempt to limit these for you as much as possible.
Drawing up and interpreting pension arrangements
In the past, even less attention was paid to pensions than is the case now. Arrangements have not always been recorded in writing and even if they have been recorded, it is not always clear how these arrangements are to be interpreted. We regularly encounter issues where employees confront employers with alleged pension agreements and depending on the circumstances of the case, it may be possible to defend against these claims. You can prevent any future discussions by properly recording any arrangements in advance.
(Unilateral) changes to pension arrangements
Changes to pension agreements are often thought lightly of. A deal is a deal, and an agreement forms through an offer and its acceptance. The same applies to changing an arrangement. Including a unilateral amendment clause in the pension agreement makes changing pension arrangements much simpler. However, a weighing of interests must still take place, which is often forgotten. It may then turn out later that the change was not legally valid. Special attention needs to be paid to a change in the supplement policy, because it not only affects active members, but also deferred members and pensioners.
(Collective) value transfer
You are obliged to place the pension with a pension provider. This may be a pension fund or an insurer. In the case of a pension fund, there is a distinction between sectoral pension funds and company pension funds. Do not confuse a company pension fund with an occupational pension fund. Depending on the circumstances when changing pension provider, it may be possible to transfer the value from one provider to another.
If an employee changes jobs, then the employee can request an (individual) value transfer. You cannot arrange something with the employee to make them decide against this. However, you can be faced with an obligation to make additional payments even though a value transfer is not necessarily more beneficial for the employee. The duty to transfer value does not apply to small-size employer if the obligation to make additional payments exceeds € 15,000 or is more than 10% of the transfer value. A small-size employer is an employer with a total wage sum of less than about € 750,000.
Employee participation plays a part for you as an employer. In a number of cases, the Works Council has the right to consent. This applies to the adoption, amendment, or retraction of a scheme with respect to the pension insurance. However, the right to consent also exists when you place the pension arrangement with a noncompulsory pension fund. A pension fund itself has an accountability body itself that consists of members and pension beneficiaries.
Pension law is complicated because it involves multiple parties. The pension provider together with you and your employer are part of the so-called pension triangle. The relationship between you and your employer is recorded in the pension agreement.
This may be part of the employment agreement or a separate document. The rights and obligations between the employer and the pension provider are recorded in the administration agreement, or in the articles of association and regulations in case of a sectoral pension fund. The pension regulations determine the rights and obligations in the relationship between the participant and the pension provider.
The Pensions Act distinguishes between old-age pension, survivors' pension and invalidity pension. Old-age pension is the pension you will receive when you reach pensionable age. Survivors' pension is the pension that your survivor will receive after your death. Invalidity pension is the pension you will receive with respect to (long-term) incapacity for work. Usually, the further accrual of old-age pension is ensured in case of incapacity for work, which means you will be entitled to a premium free accrual of pension.
Character of the pension agreement
Pensions can have the character of a defined benefit agreement, an agreement to payment of a capital sum, or a defined-contribution agreement. For a defined benefit agreement, the sum of the payment on the pension date is fixed. If it concerns an agreement to payment of a capital sum, then the accrued capital per the pension date is fixed. Based on the current interest rates and mortality risk, this capital can then be used to purchase benefits.
Pension after a divorce
Pension law is relevant for each divorce case. Pension after a divorce is arranged by means of settling the pension. The parties can deviate from the standard settlement by using a different percentage. And conversion is also possible if the pension provider agrees. The parties will, in that case, have an independent claim on each other's pension.
Indexation or supplementation
Indexation or supplementation are basically the same. Supplementation can be granted conditionally or unconditionally. Which of the two is the case is not always clear. Moreover, parties do not always agree on whether or not the conditions have been met.
If you are changing employer, then you can request a value transfer. There is no longer a set term for this. A value transfer may result in an obligation to make additional payments for your employer. If your employer qualifies as a small-size employer and if the obligation to make additional payments is too high, then the employer is not obliged to cooperate with a value transfer.
Continuing work after reaching a pensionable age
Nowadays many pension schemes have a flexible pensionable age that offers the possibility of retiring later. You will continue working after the pensionable age. The government's policy focuses on continuing work after pensionable age as much as possible. Employees and employers must however make proper arrangements to ensure their rights and obligations are clear in the case of continuing work after reaching the pensionable age.
We can be of assistance for all pension law related questions.
When conducting proceedings, corporate lawyers and lawyers work together. Together they determine the content and strategy and complement each other. The corporate lawyer is informed of the internal processes and methodology, the lawyer know how to conduct proceedings. And with respect to matters of policy, they are well-suited for each other. Compliance and Governance are frequent topics.
Legal precedence in terms of the period of limitation or, for example, the burden of proof in case of compulsory affiliation can affect the policy of the pension provider.
Working together with a lawyer with expert knowledge in the field of pension law makes working together easier. Matters we have handled vary widely.
- amending pension arrangements
- disclosure obligations
- indexation and supplementation
- period of limitation
- claims on partner's pensions
- compulsory affiliation and exemption
- right of consent, accountability and governance
- mergers and acquisitions
- equal treatment
- value transfers.