A merger, acquisition, or split can sometimes have significant financial and legal consequences for the pension situation, especially if the situation is not compliant. The transaction not only affects the employer and the employees but also the pension provider. Can it still act as such, or does the acquisition create an obligation to join a (different) industry-wide pension fund?

Our experienced merger and acquisition specialists conduct due diligence research on pensions and related topics daily. We advise on and assist with the acquisition and address related issues, such as scope investigations, financial aspects, consultations with pension providers, and post-deal activities.

In mergers, acquisitions, and restructurings, KWPS frequently collaborates with - and is commissioned by - corporate and labor law attorneys.

Contacts: ‍

Jan-Olivier Kuijkhoven and Natasja Winter

Change and harmonization processes regarding employee benefits involve a lot, especially concerning pensions. Not only the content but also the process and the various stakeholders require attention. KWPS has extensive experience in managing and advising on such processes.

This experience ranges from qualitative and quantitative research to implementation and maintenance. We project the financial impact of change and harmonization processes, both in the short and long term, based on file projections and other variables.

With our analysis, the employer not only understands which rights, obligations, and risks exist, arise, or disappear but also what the cost implications and long-term effects are. If desired, all aspects are considered during changes. To this end, we regularly collaborate with - and are commissioned by - other specialists, such as labor law attorneys.

Contacts: ‍

Jan-Olivier Kuijkhoven and Natasja Winter

Pension insurance

In the Netherlands, employers must engage an insurance intermediary if they want to take out a pension product. KWPS is certified for this purpose, is completely independent of providers, and never receives commissions. Our priority is the client's interest. We first investigate which arrangement is suitable for employee benefits and then look for an appropriate insurance product. We consider not only commercial providers; voluntary affiliation with an industry-wide pension fund or a general pension fund is also possible.

Absence and income insurance

KWPS can also advise on the following topics, request quotes, and implement insurance with the chosen provider:

- Disability benefits for employees

- Absence insurance, where the insurer takes over the employer's wage payment obligation for the first 104 weeks of illness. Between 70% and 100% of the employee's salary can be insured, optionally including compensation for employer costs such as pension, employee insurance premiums, or reintegration costs.

Illness can ultimately result in disability. In principle, the employer may terminate the employment relationship with a sick employee after two years. The employee then relies on a disability benefit paid by the UWV (Employee Insurance Agency). This benefit can lead to a substantial income reduction. Various disability insurance products can partially offset this reduction for or by the employee. These insurance products are known as WGA Gap Insurance, WIA Excess Insurance, and WIA Fixed Supplement Insurance.

Own risk bearer for sickness benefits act and partially disabled persons act

Employers who are publicly insured for the Sickness Benefits Act (ZW) and the Work Resumption for Partially Disabled Persons Act (WGA) pay premiums via the Tax Administration, and in return, the UWV pays the statutory ZW and WGA benefits and handles the reintegration of the disabled employee. If the inflow into the ZW or WGA within an organization is low, exiting the public system can be financially attractive. The company then becomes an own risk bearer for the WGA and ZW and takes on the reintegration obligations as well as the payment of the WGA and ZW benefits for the first ten years. These obligations can be placed with an insurer who may charge a lower premium. Additionally, the insurer often offers better reintegration opportunities for employees than the UWV, potentially leading to earlier recovery.

Contacts: ‍

Natasja Winter and Dirk de Wit

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Whitepaper:

Pension and insurable benefits in the Netherlands

With our analytical skills and computational power, we can solve a wide range of mathematical problems and explain them in an understandable way.

Examples include:

• Financial consequences of applying a (different or additional) collective labor agreement (CLA).
• Calculating the financial impact on pensions due to a merger or acquisition.
• Financial consequences of the Future of Pensions Act, transition to a flat-rate premium, partner’s pension, transitional law for staggered premiums, and compensation.
• Financial consequences of retroactively joining an industry pension fund.
• Financial consequences of terminating voluntary affiliation with an industry pension fund.
• Determining the actuarial equivalence of a pension scheme.
• Pension damage.
• Checks on premium deductions and remittances.

Contacts: ‍

Natasja Winter and Dirk de Wit

The WTP came into effect on July 1, 2023, ensuring that every new pension scheme is radically different from what we have been accustomed to. It is a significant shift. All existing schemes in the Netherlands must be adjusted by January 1, 2028. The main features of the WTP are:

• The pension scheme must be a defined contribution plan. Benefit agreements, such as average salary and final salary schemes, are no longer permitted.
• The contribution for building up a capital for retirement pension and survivors' pension after the retirement date must be an age-independent percentage expressed in the pensionable salary, with a maximum of 30%.
• The partner’s pension in case of death before the retirement date (risk insurance) must be a guaranteed benefit expressed as a percentage of the salary, with a maximum of 50%.

The WTP has legal, tax, insurance, actuarial, and employee benefits implications. Compensation and approval are also extremely important. KWPS takes care of analysis, advising, communication, validation, compensation, and implementation. We are pleased to act on behalf of the employer or the Works Council.

Contacts:

‍Natasja Winter and Dirk de Wit

‍

Whitepaper:

Pension and insurable benefits in the Netherlands

A simple booklet - Dutch New Pension Act

KWPS regularly assists (starting) organizations with fewer than 25 employees. A pension scheme is an important aspect of good employer practices and is becoming increasingly significant for recruitment. It is a misconception to think that a pension scheme always costs the employer a lot of money.

KWPS guides the employer through the Dutch pension landscape, develops a suitable pension scheme, requests quotes, and arranges them with a provider starting at a basic fee of €5,250 (excluding VAT). Research into the company's activities is part of this process. It must be established that there is no mandatory industry pension fund applicable.

In addition to a pension scheme, we can also explain and arrange absence and disability insurances for your organization. The basic fee per insurance is €2,250 (excluding VAT).

Contacts:

Patricia Zonneveld and Dirk de Wit

It can be a very unpleasant surprise: an industry pension fund that claims retroactive affiliation based on the fund's mandatory status. The scope decisions are far from clear. Not without reason, a significant portion of pension-related lawsuits concerns this issue. Employers often find themselves at a disadvantage.

Pension funds have extensive detection mechanisms and the means to hire the best lawyers to avoid unfavorable precedents. Therefore, it is crucial for employers to proactively address the scope and business activities. Waiting, making goal-oriented arguments, and underestimating the issue usually backfires sooner or later.

KWPS can provide support, not only by conducting research into the scope and consulting with pension funds but also by exploring and determining alternatives, such as actuarial equivalence, temporary dispensation, or a different business structure.

Contacts:

‍Natasja Winter and Dirk de Wit

Early retirement of older employees carries the risk that the employer is liable for a 52% early retirement scheme (RVU) tax, due to age-dependent dismissal. KWPS specializes in early retirement and RVU tax. We can identify and mitigate these risks.

We examine the objective characteristics and conditions of the termination arrangement and analyze the situation thoroughly in consultation with the employer. Subsequently, the employer can often confidently await any potential discussions with the Tax Authorities. In case of doubt, KWPS can facilitate coordination with the Tax Authorities. KWPS can design individual or collective schemes that will not incur RVU tax. There are legal - but not widely known - exceptions that apply.

Early retirement is often the result of not applying and/or failing sustainable employability policies. By formulating and implementing a well-thought-out employability policy in time, early retirement can be prevented or delayed.

Contacts:

‍Jan-Olivier Kuijkhoven and Patricia Zonneveld

Administration can sometimes be time-consuming or pose risks for employers, especially when there is a high chance of errors. KWPS can take over such tasks from employers and develop methods that minimize risks and reduce the time required. Examples include administering special employment conditions such as early retirement schemes or the management tasks mentioned below for pension and other insurances.

Management tasks related to (pension) insurances are often outsourced to KWPS by employers. Once the insurances are implemented, there may be a desire for KWPS to play a role due to time constraints, unfamiliarity with the subject, or risk management. This can include enrolling new participants, updating and administering new salaries, and handling annual standard employee communications.

Control activities are necessary to verify whether premium deductions from wages correspond with remittances to the insurer and whether employees who have opted for voluntary modules are adequately covered. Control activities often reveal that incorrect deductions have been made and that no or insufficient coverage has been established. In consultation with KWPS, you can define how often and which control activities are appropriate.

Contacts: ‍

Patricia Zonneveld and Dirk de Wit

‍

Whitepaper:

Pension and insurable benefits in the Netherlands