Supreme Court clarifies limitation period on pension premiums

Publication date: April 22, 2025

On March 21, 2025, the Supreme Court ruled that the limitation period for the collection of pension premiums by an industry-wide pension fund starts from the moment the premium should have been paid according to the administration agreement. This ruling is important for both pension funds and employers.

Five-year limitation period

In this case, an industry-wide pension fund demanded payment of overdue pension premiums. The employer argued that the claim had expired. According to the employer, the claim of the pension fund became due from the moment the mandatory participation started (January 1, 1999), and due to the five-year term that then begins, all claims have expired. The discussion revolved around the starting point of the statutory five-year limitation period.

According to the Supreme Court, the limitation period starts from the moment the premium should have been paid according to the administration agreement (while respecting the boundaries of article 26 of the Pension Act). If the agreement states that the premium must be paid by the end of the month, the five-year term starts at the end of that month – regardless of whether the pension fund is aware that the premium is missing (for example, because the employer was wrongly not affiliated with the pension fund).

Although the premium invoice has not been sent (which is the case if the pension fund is not aware of this employer), pension premiums are formally due within a few months after the due date or a maximum of six months after the relevant year (depending on the payment term from the administration agreement), and the five-year limitation period starts running.

Extension of the limitation period

The main rule is clear: five years after the premium due date, the claim can expire. However, according to the Supreme Court, there are exceptions. For example, in cases of intentional concealment of information or if reasonableness and fairness require otherwise.

A pension fund can also claim damages from the employer instead of the overdue premium amounts. However, the Supreme Court does not comment on this option and the limitation period that applies in that case, which can be up to twenty years.

Importance for practice

This ruling emphasizes that pension funds must be alert to timely collection. Employers must also be vigilant. The employer must monitor for itself whether there is a limitation period. The risk of a claim from the pension fund against the employer regarding overdue pension premiums remains lurking.

This ruling also underscores the importance of conducting a pension due diligence during a merger or acquisition. Often, premium arrears then come to light.

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