The Dutch government has approved the implementation of new pension lump sum proposals for 1 January 2023, rather than 2022 as initially outlined, on the understanding that a legislative amendment will be introduced in the interim period to address implementation problems.

A motion has been submitted to the Senate emphasising this commitment, and acknowledging that the implementation of a one-off lump sum payment as currently outlined could result in several “complex situations”, as well as high costs for implementation and issues in terms of communication with members.

The proposed legislation offers participants to take up to 10 per cent of their accrued pension in a lump sum upon retirement.

In light of the concerns, the motion urged the government to provide further clarifications and adjust the regulations if necessary, as well as delaying the introduction of the lump sum by a year to provide time to look for an alternative implantation that is less complex, more communicable, and has “substantially lower” implementation costs and support from implementing organisations.

Concerns around the implementation of the changes were initially raised by the Pension Federation and Association of Insurers after the bill was first passed by the House of Representatives in November 2020.

In particular, the group argued that the proposals would create “disproportionate complexity” in administration, communication and guidance, and that a good idea had become “almost unworkable”.

This was due to issues around the introduction of a second commutation moment that was added to the bill by a second memorandum of amendment, which the group argued would have made the proposed implementation date of 1 January 2022 “unrealistic” amid increased complexity.

Considering this, the Pensions Federation and the Association have now welcomed plans for an amendment, stating that it is pleased that the proposals will not be “burdened” with greater complexity and subsequently higher implementation costs.

A further consultation is also expected to be undertaken with legal experts, to consider whether early retirement (RVU) can be implemented by pension funds, with a letter on this expected to follow to Senate.

Share Story: