As an independent entrepreneur you can also accrue a tax-efficient old-age pension reserve (FOR), take out annuity insurance, or buy a bank savings product. The 'self-management' option is available to directors/majority shareholders.
FOR versus own management
The FOR is not a pension scheme; it is a special line item on your company's balance sheet. The tax authorities defer taxation on this amount. You can only make such a reservation if your company makes a profit. The scheme only applies to self-employed persons. This tax benefit allows you to have money at your disposal for your business that you would otherwise have to pay to the tax authorities. If you discontinue your business or retire, you must use the FOR to buy an annuity.
A different scheme exists for directors/major shareholders. If you own at least 10% of the shares you can accrue a pension by recognising a reserve on the company's balance sheet. The pension reserve may be deducted from the profit.
Both schemes are quite complicated, so be sure to seek advice from a tax adviser.
This allows you to accrue your own pension, which provides a guaranteed benefit as of the retirement age. Annuity insurance is also an option to consider when you receive severance pay so as to arrange a supplement to your unemployment benefit or to cover the period up to your retirement.
Your severance payment will then be deposited tax-free with an insurer, who will put it away at a particular rate of interest and pay it out to you periodically, either directly or at a time of your choosing.
The advantage of annuity insurance is that you have certainty; you can agree in advance on a guaranteed return and so you are not dependent on the interest yield. The costs can be a disadvantage, though. Always compare an annuity insurance policy with a bank savings product.
One way of building up tax-free capital to top up your pension is what is known as bank saving. Similar to ordinary savings, you put money into a savings account. The differences are that you decide in advance how long you will be saving for, what you are saving for and that no wealth tax is due. You can choose either the savings or the investment option. With the first option, you pay almost no costs. The investment options costs between 1% and 17%.
You can save for a supplementary pension at a bank only if there is a pension gap. This also applies for an annuity. The amount in your account is tax deductible. If you retire, the amount is released and converted into an annuity that is paid to you periodically. You do pay tax on these benefits.