Last year, social partners and the Dutch government reached an agreement on pension reforms in the Netherlands. The agreement’s aims – amongst others – is to abolish defined benefit schemes and to prescribe flat rates for defined contribution schemes. It was expected that the reforms would enter into force through an accelerated legislative approval process from 1 January 2022 (with a transition period from 2022 to 2026). However, since the legislation took more time than expected to be prepared, the planned implementation date has been postponed to 1 January 2023. Furthermore, the transition period has been postponed as well: from 2023 to 2027.

Consequences of the postponement:

• The effective date of the pension reforms will be postponed from 2022 to 2023;
• The expected end of the transition period will also be postponed from 2026 to 2027;
• The relaxation of pension reduction rules for pension funds will most likely also apply for 2022. This means
• That pension reductions will only be required in case of a coverage ratio below 90%;
• The indexation limitations for pension funds (no indexation if the coverage ratio is below 110%) will remain applicable in 2022; A uniform partner pension will be delayed to 2023;
• Postponement of the pension reforms do not prevent employers from amending their pension schemes in advance of the reforms.

Read more @Lexology