Self-managed pension

On 1 January 2014 the Act for increasing the state pension and retirement age (in dutch: Wet verhoging AOW- en pensioenrichtleeftijd) will come into effect.

From that moment forward self-managed pensions which have been arranged in the past will have to comply with the new requirements. If the pension letter does not fulfill all the new requirements the pension letters will need to be amended.

The changes which will come into effect on 1 January 2014 are as follows:

• The legal pension age will go from 65 to 67 and will be automatically adjusted to the prevailing life expectancy at that time;
• Final salary ruling: The maximum accrual percentage will be lowered from 2% to 1.9% per year. Therefore you save less for your retirement per year;
• Average salary ruling: The maximum accrual percentage will be lowered from 2.25% to 2.15% per year. Therefore you save less for your retirement per year;
• Pension agreements must be adjusted with inflation if the pension accrual has stopped but the employment agreement has not yet ended.

Your self-managed pension must fulfill all the new conditions. If not, there may be undesired fiscal consequences. A review of the existing pension letter and the adaptation of this to the new conditions is therefore advised and need to be done accurate.

If you no longer wish to manage the administration of your self-managed pension then you should also act before 1 January 2014. For instance you could make the pension premium free or let an insurer take care of it. From a fiscal standpoint, if amending your pension is not done properly then there may be adverse effects.

If you have not yet made the necessary changes to your self-managed pension then now is the time to do so.