The pension agreement is a significant step closer to the realisation of the new pension system.
The specifics of the pension agreement have now been finalised
In summer 2019, the Dutch government and the national social partners agreed on an outline pension agreement. These parties continued to negotiate on the details of the pension agreement in 2020, after which the Ministry of Social Affairs and Employment set to work to formulate a legislative proposal. Stakeholders were then given the opportunity to respond to the draft legislation. J&J was one of the parties that provided their input.
On 10 May 2021, Minister Koolmees announced that the new legislation will come into effect by 1 January 2023 at the latest. The Minister is giving the sector four years to implement the new system, the entire process is to have been completed by 1 January 2027. All in all, important progress is being made towards the realisation of a new pension system.
Why new rules?
Consensus exists nationally about the need to introduce new pension rules. Much has changed in our society in recent years: the population is ageing and retirees outnumber the people in work. Many pension funds have not been able to increase pensions and some funds have even been forced to decrease pensions. People are changing jobs more often and fewer people are being given permanent contracts. A changing labour market has made new pension agreements necessary; it will be important for the pension system to accurately reflect these agreements.
What will change?
One object of the new pension agreement is to ensure that pensions become affordable. For J&J, this means all financial risk passing from the employer to the employee. However, the solidarity aspect of the old system will be retained. So, members will bear risks jointly. The new pension agreement must also ensure that the new pension system is sustainable in the long term. The most important changes follow below:
- The state pension age will increase less quickly (see wijzeringeldzaken.nl for your new state pension age).
- Everyone will accrue a personal pension pot. In our case, this means that J&J will no longer be subject to an additional contribution deposit obligation.
- The contributions paid will be key, not the amount of the ultimate benefit. Because of this, the amount of your future pension will no longer be guaranteed. Your pension will change in tandem with the economy. The closer an employee gets to retiring, the fewer changes there will be. This will ensure that the pension benefit paid to retirees fluctuates as little as possible.
- As of 1 January 2023, employees will be able to withdraw a lump sum from their pension capital when they retire. However, the remaining lifelong pension benefit will be lower if they do. Conditions apply.
The employer (Johnson & Johnson), the works councils and the J&J OFP will establish new pension agreements in line with the new frameworks. An Employer&Employee (E&E) work group has been set up for this purpose. This work group consists of employer and employee representatives and members of the Pension Council too. One major decision for the work group is whether to include the pension rights accrued in the new scheme, the technical term is ‘entry’, or leave them in place in the old scheme.
We will keep you up-to-date
There are no changes for you at this stage. We will let you know as soon as we have any more information about the consequences of the new legislation and pension system for your pension and its administration.