Knowledge article

The options for 
your pension from your employer

If you are accruing a pension through your employer, there are choices to be made when your retirement date is approaching. For example, you can exchange part of the partner's pension for a higher pension for yourself, and sometimes the reverse is also possible. You can also opt to have more paid out in the first few years of your retirement and less paid out later, or vice versa. The new pension agreement means that there will be more choices for you. Make an informed choice for a pension that suits you. This article lists the options.

Higher retirement or partner's pension?

Within your pension scheme, you usually accrue a partner's pension as well as a retirement pension. The partner's pension is intended to provide for your partner, if any, following your death. But on your retirement date, you can also use the value of this pension to increase your retirement pension under certain conditions. This is possible only if your partner approves. If you are single, you can decide for yourself.

If you have a partner and do you want him or her to have more to spend after your death, it may be possible to use part of the retirement pension to increase your partner's pension.

Variation in the level of your pension?

Within certain limits, it is possible to vary the amount of your retirement pension. This allows you, for instance, to receive a higher pension in the first few years after you retire. You will then receive a lower amount after a few years. This is useful if you expect to need more income immediately after retirement than when you are older, e.g. if you still have children studying or mortgage payments. The reverse is also possible if, for example, you have a younger partner who is still working.

Retiring earlier or later?

If you want to retire early, you can decide this yourself in many cases. If you retire early, the pension amount will be lower, because you accrue less and receive your pension for a longer period. You can also postpone your retirement date. You will then receive a higher pension amount later.

If you want to stop working sooner or continue working for longer, discuss this with your employer and get in touch with the pension fund or insurer that administers your pension scheme.

Fixed or variable pension benefits

If you have an investment-linked pension, you now have the possibility to opt for a lifelong fixed or variable pension benefit. This means that your pension money is invested also after your retirement date. This may result in a higher pension. In the case of an insurer such as Nationale-Nederlanden, you and your employer can choose whether the benefit is fixed by default or variable by default.

Withdraw a maximum of 10% of your pension as a lump sum

In the pension agreement, it has been agreed that you will soon be able to withdraw an amount from your pension as a lump sum. This can be done only on your starting date and the amount may be no more than 10% of your retirement pension. You can decide for yourself how you spend the money. You will have to pay tax on it immediately. This new choice can be attractive for paying off a debt (such as a mortgage), travelling, arranging your healthcare or renovating your own home. Remember: this choice will leave you with a lower pension and may affect the amount of supplements you receive and/or the tax rate payable in that year. So think carefully before using this option and obtain advice from an advisor. You will probably be able to use this option from 2023. Do you want to know more about lump-sum withdrawals (in dutch)? 

Saving for early retirement (leave saving scheme)

The new pension agreement makes it possible to save in a tax-efficient way in order to retire early. This can be done by saving extra days of holidays that you take before you retire. Contact your employer to discuss the possibilities. 

Contact your advisor to discuss your options.