Read the original July 2023 newsletter here.

Pension Special

New pension act as of 1 July

As of 1 July 2023, the Dutch Future Pensions Act (Wtp) will enter into force. This law contains new rules for employers and employees about pension accrual and AOW. Lupacompany explains in this newsletter what the new rules mean for you.

Furthermore in this newsletter:

• Pension file;
  • Annuity: an honest overview of advantages and disadvantages;
  • Farewell to the fiscal retirement reserve;
  • AOW for expats;
  • Single people AOW, yes or no?
  • Building up a pension for entrepreneurs: the fine print.
• Are you a DGA? This has changed fiscally for you in 2023;
• Lupacompany services: administration by Aeslupa and more

New Pensions Act (Wtp) 2023

As of 1 July 2023, the Future Pensions Act (Wtp) will enter into force. There will then be a transition period that runs until 2028: then everyone must have switched. Until then, your (or you as an) employer can implement the new working method. The new system will be - as you can read on the  government website - "more transparent, more flexible and better tailored to the current economy and labor market". That sounds nice, but what does it mean? Lupacompany explains.

Read more about the new pension system here.

Or check below the video what the transition to the new system means for you as an employee, employer, (self-employed) entrepreneur or pensioner in practice.

In this video, the Ministry of Social Affairs and Employment (SZW) explains (in Dutch) in a simple way what the new pension system will look like and what the consequences will be for employees.

Pension transition in practice

As of 1 July, we are dealing with a pension transition. Although it will take more than 4 years before pension schemes from the new Future Pensions Act (Wtp) must be fully implemented, you have to deal with the changes before. As an employer and entrepreneur, you probably need to prepare. And as an employee or pensioner, you want to know where you stand and what you can expect. Lupacompany explains:

What does the pension transition mean for....

Employees

Depending on the social partners in the industry or employer, choices will be made about the pension already accrued in the old system and the pension according to the new law. You do not have to arrange anything yourself and will be kept informed by your employer, the trade union and/or pension provider about what the pension transition will mean for you in concrete terms. But you don't have to wait passively. Through your work council you can influence the (intended) decisions of your employer. Do you want to know what the consequences are in your company? Ask your employer what to expect. 
 

Employers

Are you an employer and does your company fall under a collective labor agreement? Then most of the work related to the pension transition is taken off the hands of the social partners. Parties such as the employers' association, the UWV and the trade union will keep you informed and can answer your questions about actions to be taken. If you are affiliated with a pension insurer or premium pension institution (PPI), decisions will have to be made about the transition from the old to the new system. This can be a complex and labour-intensive process. By drawing up a transition plan in time, in which the workforce is analyzed and the steps to be taken are explained, you start the internal transition thoroughly. The Works Council has the right of consent and can provide input on pension policy. Take the staff along in the process by showing with open communication where you stand as a company and what they can expect. On  this website  (in Dutch) you will find information for employers, with which you will be guided through the transition process with a toolbox, among other things. Obtaining external advice and/or support is a solution for employers who do not have the knowledge and tools for such a transition.
 

(Self-employed) entrepreneurs

As an entrepreneur, you are automatically entitled to AOW, but in most cases you have to arrange your own supplementary pension. With the new rules for pensions, the self-employed will have more room to accrue a tax-advantaged pension from 2024. On the Dutch Governmental website for entrepreneurs, you can find more up-to-date information about  pension accrual for entrepreneurs. Lupacompany supports freelancers, entrepreneurs and DGA's with arranging supplementary pensions.

Pensioners

If you are entitled to pension, the pension transition can lead to changes in the payment of your pension. Pension funds can decide for themselves how they deal with people who receive benefits within the new rules. For example, your current benefits may be transferred to the new system. This can affect the amount of the benefit. Are you going to lose out because you are included in the transition? Then it can be stipulated that you will receive compensation, but this is not required by law. The administrator of your pension must inform you in good time and clearly about the consequences of the new rules for you as a pensioner. If you have any questions, please contact your pension fund.

Pension files

Lupacompany regularly writes articles about pension, annuity and AOW. In this way we hope to help you to get a clear picture of how and what you build up and what you are entitled to when you stop working. Below you will find a selection of the most recent blogs about your retirement provision. Do you want to read more about a topic? Click on the title to go to the complete text.

Annuity: an honest overview of the advantages and disadvantages

If you are an entrepreneur and want to build up a pension, you have to arrange this yourself. The most common way is to do this through an annuity policy. You can arrange this through insurers, banks or investment institutions. There are a number of advantages and disadvantages associated with this. In this article we explain which ones.

Abolition of fiscal old-age reserve

In the Spring Memorandum 2022, the government indicated that it intended to abolish the old-age reserve (FOR) as of 1 January 2023. Have you built up an old-age reserve through this scheme before that time? Then it can still be settled on the basis of the rules below. The main reason for abolishing the FOR is that in about half of the cases the reservations are not used as old-age provision. This article explains how the FOR operated.

AOW for expats: accruing State pension in NL

If you live or work in the Netherlands, you usually accrue a basic pension from the Dutch government (AOW). You are entitled to payment of the accrued amount if you are of legal age to stop working. Do you live and work as an expat in the Netherlands? Then read in this article whether you accrue AOW for expats and how you can have it paid out.

Partner to nursing home? Single AOW (state pension), yes or no?

Are you married or cohabiting in The Netherlands and is your partner going to a nursing home? Then you will receive a letter from the Social Insurance Bank (SVB) in which you can make the choice to convert a married state pension (in Dutch: AOW) to a single AOW. This seems attractive: a single person receives considerably more AOW than someone who lives together. But in practice, converting the AOW often has a negative effect. In this article we explain what you should take into account.

Building up a pension as an entrepreneur in The Netherlands?

These are the actual costs of an annuity policy

While employees accrue pension through their employer, as an entrepreneur you have to arrange such a source of income yourself. If you take out an annuity policy, you set aside money to be refunded later as a benefit on top of your AOW. With a number of advantages, banks, insurers and the government are trying to make this option attractive. But the disadvantages are often communicated less clearly. That is why we dived into the small print and listed the actual costs of 5 large providers.

New rules for Director major shareholder (DGA)

In 2023, a number of tax changes have been implemented that you as a DGA may want to take into account:

Margin of efficiency (Doelmatigheidsmarge)

As a DGA, you could use the efficiency margin until 2023: you can reduce your salary by a percentage (the efficiency margin) to the salary of an employee who has the most comparable employment as yourself. In order to bring the tax on the income of entrepreneurs even more into line with that of employees, the efficiency margin has been completely abolished as of 2023. This means that a larger part of your income as a DGA is taxed than before.

Current account

In addition to abolishing the efficiency margin, there are new rules from 2023 that must limit the excessive borrowing of your bv. If you borrow more than € 700,000 from the bv from 2023, the additional amount will be taxed as income from a significant interest. In the measurement of the loan, all debts are included except for any home debt. In doing so, receivables on your bv are not taken into account and loans from several bv's are added together. However, the bv must calculate interest on the entire amount, including the part that has been taxed as a significant interest.

Are you a DGA and do you want to know more?

In  this article  we wrote more about usual wages and the efficiency margin. Or contact  us  if you have any questions. We are happy to help you move forward.

Services by Lupacompany

Lupacompany does more than administration. For example, we help companies with strategic advice, we support employers with payroll and personnel policy, we have legal and tax experts in-house and we provide administration and divorce coaching for private individuals.

Administration by Aeslupa

Aeslupa helps people with their finances and financial affairs.

We do this through  coaching,  management  and  administration. Aeslupa is also listed as an aid organization for the application for a basic bank account.

Do you have any questions about this newsletter? 
Do you want us to think along with you about your specific situation? 
Feel free to  contact  us. We are happy to help you!