A group pension is a joint pension scheme for a group of employees. What is the best way for employers to arrange a group pension? Zwitserleven, the specialist in group pension schemes, will be happy to discuss this with you.
Are you required to provide a pension for your employees?
It is not a legal obligation to offer your employees a pension, unless this is stated in the collective bargaining agreement (CBA). In the Netherlands, however, the employer's pension is an important and very common employment condition.
Employer's pension: tax relief, low costs
The Dutch government encourages employers to arrange a pension for their employees. To this end, pension contributions are tax-deductible. As an employer, you do not have to pay all the costs alone. You can share the costs with your employees. The employer and employee will then each pay part of the pension contribution. The employee's share is withheld from the gross salary.
In other words, having a pension scheme in place is an efficient way to provide your employees with income even after their retirement.
Three pension elements
For residents of the Netherlands, the pension can consist of three elements. First of all, there is the state pension, a statutory scheme that provides everyone with a basic pension. If the pensioner worked for a company with a group pension scheme in place, he or she will receive a pension from their employer. In addition, people can make arrangements for a supplement under a private pension scheme or by accruing assets in some other way.
What types of pension schemes are there?
The two most important pension schemes are:
- Salary/service years schemes (e.g. average pay)
In the case of an average pay scheme, the employee receives a pension based on the average salary he or she earns over the years. The pension accrual is a kind of "weighted average" of the employee’s salary. As salaries rise over time, the pension contribution also increases accordingly. The average pay scheme determines how much pension the employee receives on the retirement date.
- Defined contribution scheme
In the case of a defined contribution scheme the pension contribution is the basis. The employer decides how much pension contribution he or she pays in. This contribution is fixed. The pension received by the employee on the retirement date is not fixed. The amount of pension depends on the proceeds from the contributions. The contribution may be used for guaranteed capital insurance or higher-risk investments with potentially higher returns.
What does a pension cost for the employer?
For the employer, the costs of the pension scheme are particularly important. These depend on the choices you make. The costs will increase if you opt for more guarantees for your employees. With the help of the i-Pensioen calculation tool you can make an estimate of the costs of a pension for the employer, based on the number of employees, average age, and income.
All products for a group pension at a glance
- Nu Pensioen (Pension Now) is clear, responsible and complete. A new and clear way to accrue an investment-based pension. This pension scheme is a product of Zwitserleven PPI and Zwitserleven.
- Nu PensioenRekening (PensionAccount Now) is different from other pension schemes. If an employee dies before his or her retirement, the money invested goes into a pension for their partner and children. Nu PensioenRekening is a product of Zwitserleven PPI and Zwitserleven.
- Exclusief Pensioen (Exclusive Pension) is a highly transparent pension scheme for employees. Under this defined contribution scheme, you pay separate amounts for pension, death, occupational disability and costs.
- i-Pensioen (i-Pension) is managed fully online and therefore very affordable. This pension scheme is available as a Middelloon (average pay) scheme.
- The Group Risk Insurance is an employee insurance policy. It allows you to offer your employees something extra, without the mandatory tax rules and legal documents that can complicate a pension scheme for employees.