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Step-by-step guide regarding pension expenses and coronavirus.

Many employers have fallen into acute difficulties as a result of coronavirus. They have seen earnings drop significantly, or come to a complete halt, and are facing an uncertain future. This may be the case for you as well. We understand that this will have certain implications for your pension scheme premium payments.

We would like to help you find a solution for this along with your adviser. We will, of course, come up with a tailor-made solution as there is no such thing as a standard pension scheme. This is why we recommend you contact either your adviser or us so that we can discuss which solution is most appropriate for your situation and pension scheme.

Did you know that your pension expenses are covered by the Emergency Bridging Measure for the Preservation of Employment, also referred to as NOW? We have summed up all the different options available to you.

Reducing pension expenses options in a scheme

1. Temporary Emergency Bridging Measure for the Preservation of Employment (NOW)

The government is trying to help employers and employees in these difficult times by introducing measures to protect incomes and jobs. One such measure is NOW. The employer pension contribution is covered by this scheme.

How does NOW work?
  • You will be able to submit your NOW application to the Dutch Employee Insurance Agency from 6 April. The application period will run up to 31 May 2020.
  • Your employees will be entitled to the NOW scheme, irrespective of whether they are on a permanent contract or are temporary employees.
  • Your compensation, if you are entitled to it, will be calculated by the Employee Insurance Agency on the basis of your revenue and wage bill. .
  • Your compensation may not exceed 90% of the wage bill and will be calculated proportionately to the decline in revenue.
  • If your application is approved, you will receive an advance of 80% from the Employee Insurance Agency within two to four weeks.
  • You will be compensated for wage expenses for a period of at least three consecutive months. You will receive the advance in three instalments from the Employee Insurance Agency.
  • A financial calculation will then be made at the end of this period, based on the actual decline in revenue.
What are the conditions?
  • You foresee a decline in revenue of at least 20% (for the consecutive period that you are applying for NOW), when compared with the same period in the previous year. This will be based on the revenue earned from January 2019 up to December 2019, divided by four. It is therefore not necessarily based on the revenue earned in March, April and May 2019.
  • You will continue to pay your staff their full salary and will not dismiss any employees for commercial reasons while receiving this compensation. If a staff member is dismissed, the NOW compensation will be adjusted accordingly.
Calculation of the compensation?
  • The Employee Insurance Agency uses the data specified on the income tax return, as recorded by the Dutch Tax and Customs Administration. The covered earnings provide the basis for the Employee Insurance Agency’s calculations.
  • In addition, a fictitious, flat-rate margin of 30% will be added to the employer’s expenses that include: the accrual of holiday allowance, the pension and the employer contributions. The 30% margin is a fixed percentage and is not based on actual expenses, such as pension contributions. Your employer’s expenses may be higher or lower than the actual margin.
  • A salary cap of € 9,538 has been set per employee on a monthly basis. The NOW regulation will not compensate surplus incomes exceeding this amount. .
  • The wage bill during the NOW scheme period (three consecutive months) will be compared with the wage bill in January, as recorded by the Dutch Tax and Customs Administration. It is therefore important that tax income returns are submitted on time to the Dutch Tax and Customs Administration, as compensation can be calculated only on the basis of the wage bill.

Pension scheme set to continue as usual.

The NOW compensation is something you will have to arrange with the Employee Insurance Agency. We will not need to be informed about this. You will continue to pay your pension contributions to us in full. The pension scheme will continue to run as usual.

More information

If you want to find out more about the NOW scheme, please visit the government website:

2. Adjusting your pension scheme

You also have the option of temporarily halving the old-age pension accrual, putting the pension scheme on hold for a few months or increasing the employee contributions. These types of changes will require the consent of all pension scheme participants and will usually mean the pension scheme needs to be amended. Please consult your adviser to find out more about the options available to you.

3. Payment disclaimer

A significant change in circumstances entitles you to reduce or terminate the premium payments. An article in your administration agreement elaborates on this in further detail, based on Section 12 of the Dutch Pensions Act.

Articles per agreement
  • Zwitserleven NuPensioen: article (4.2) ‘Amendments to the Pension Agreement’. 
  • Zwitserleven Exclusief Pensioen: article ‘Rights reserved by Employer’
  • i-Pensioen ‘paragraph 3 ‘A significant change in circumstances’ of article ‘Rights reserved to make amendments’.

If you would like to invoke the payment disclaimer, keep the following in mind:

  • You will not qualify for the Temporary Emergency Bridging Measure for the Preservation of Employment (NOW).
  • You will be required to draw up an auditor’s report. This means an accountant will have to evaluate your company’s ability to continue as a going concern and will be required to record his or her evaluation in the auditor’s report. We are aware that this will mean additional expense for you, which is why we mentioned alternative options in the previous sections.
  • The payment disclaimer can be invoked only for the employer contribution as we will require the employee contribution to continue to be paid to us.
  • Zwitserleven will inform all participants as to how this will affect their pension.