Dutch pension funds back early retirement bill

The Federation of Dutch Pension Funds has supported the Order in Council for the Lump Sum Payment, Early Retirement Scheme and Leave Savings Scheme Bill, emphasising the need for pension provider duty of care.

The group stated that, in the context of duty of care, it is beneficial that pension providers who make use of their statutory right to the lump sum highlight the possible consequences for income tax and national insurance contributions owed.

The federation acknowledged that this general information obligation would also be extended to other options, noting however, that because pension administrators have to incorporate this into letters, member portals and pension planners, this will require a “reasonable period of time” to be arranged adequately.

This in turn, it stressed, requires the government to ensure that the tax authorities, Sociale Verzekeringsbank (SVB) and municipalities also adequately fulfil their duty of care.

In addition to this, the federation has highlighted a number of areas that require further consideration before displaying the indicative amounts in the pensions register, such as how premium and capital agreements, and the divide between the retirement pension and the survivor’s pension, should be dealt with in the Pensions Register.

It noted that whilst the draft Order in Council is based on the legally attainable entitlements to retirement pension, as many employees stop working at the state pension age, this starting point “does not seem realistic”.

The group has also argued in favour of showing the indicative amounts two to five years prior to the target retirement age, also assuming that the URM system, with three scenarios, will not apply when presenting indicative amounts.

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