Setting up a pension scheme for your employees: step-by-step plan and costs
Setting up a pension scheme means that, as an employer, you agree a contribution, choose a pension provider and record this in pension regulations. A good scheme helps you find and keep people, and in practice it can be arranged within six to eight weeks if you follow the right steps. This article shows you which ones, and what it costs.
Is an employer obliged to offer a pension scheme?
No, there is no general legal obligation. Even so, according to the Dutch government around 90 percent of employees have a supplementary pension through their employer, and many employers wrongly assume they are exempt. An obligation can arise in two ways. Check these first:
- Mandatory industry-wide pension fund (bpf). Sectors such as hospitality, retail, cleaning, metal and engineering, construction and healthcare have a mandatory fund. If your company falls within its scope, you must join, including with retroactive effect. A back-payment assessment covering several years can cost hundreds of thousands of euros.
- Collective labour agreement. A collective labour agreement that has been declared generally binding may contain pension arrangements. In that case you must offer that scheme.
Whether you fall under a bpf depends on what your company actually does, not on the SBI code (Dutch standard industrial classification) alone. If in doubt, ask the fund for a written ruling and keep it with your records.
If neither applies to you, you are free to offer a scheme or not. Two rules always apply. The Pensions Act requires you to tell a new employee in writing or electronically, within one month of starting, whether you offer a pension scheme and, if so, from when and with which pension provider. And as soon as you offer a scheme, the Pensions Act applies and you must treat everyone in the same group equally.
What types of schemes are there after the Wtp?
Since the Future Pensions Act, you can only set up defined contribution schemes: you agree on a contribution and the employee builds up personal capital that is invested. You choose between pension providers:
| Pension provider | Suitable for | Please note |
|---|---|---|
| Premium pension institution (PPI) | Employers who want a modern, transparent defined contribution scheme with low costs | Risks (death, occupational disability) are insured separately |
| Insurer | Employers who want accrual and risk cover with a single party | Compare costs and investment policy; contracts usually run for five years |
| General pension fund (APF) or voluntary affiliation with a bpf | Larger employers or employers who value solidarity | Less tailoring, sometimes a minimum size |
What contribution rate is usual?
You agree a fixed percentage of the pensionable base. That is the salary minus the franchise (state pension offset), the part of income already covered by the state pension (AOW). The percentage is the same for every age.
The law sets a ceiling, not a floor. According to the Dutch Tax Administration, the tax-approved maximum contribution is 30 percent of the pensionable base. In my practice, SME employers usually choose between 8 and 15 percent. That is experience, not a market figure. Where you end up depends on three things:
- Your sector and the labour market. Compare with what the bpf or collective labour agreement in your industry offers, even if you do not fall under it. Job applicants do the same.
- The franchise. A lower franchise makes the pensionable base larger. At the same percentage employees build up more, but you also pay more.
- The employee contribution. If your employees pay part of it, the total percentage can be higher without your costs going up.
What does a pension scheme cost for 10 or 25 employees?
The costs consist of the pension contribution, risk premiums (partner's and orphan's pension, contribution waiver in the event of occupational disability) and administration costs. You calculate the contribution on the pensionable base.
Worked example (indicative). An employee earns €45,000 a year. With a franchise of approximately €19,000, the pensionable base is around €26,000. The exact franchise is set out in your pension regulations. At a contribution of 12 percent, that is €3,120 per employee per year. This is what it looks like at three percentages, with the same average salary for everyone:
| Contribution | Per employee per year | 10 employees | 25 employees |
|---|---|---|---|
| 8% | €2,080 | €20,800 | €52,000 |
| 12% | €3,120 | €31,200 | €78,000 |
| 15% | €3,900 | €39,000 | €97,500 |
Own calculation, indicative for 2026: salary €45,000 and pensionable base €26,000 per employee. Pension accrual contribution only; risk premiums and administration costs come on top. Tax-approved maximum of 30 percent: Dutch Tax Administration, V&A 23-014 (1 July 2023).
Add the risk premiums and administration costs, usually a few hundred euros per employee per year. You pay for the advice on setting up the scheme once. If you agree an employee contribution, your costs go down. If, for example, the employee pays one third of a 12 percent contribution, that is 4 percent of the base, €1,040 a year. You then pay €2,080 per employee, or €52,000 instead of €78,000 for 25 employees.
In reality salaries differ and not everyone works full time. The pension provider calculates the contribution per employee. For your budget, this example is a good starting point.
What is a good employer pension scheme?
A good scheme is not automatically the most expensive one. Test a proposal on five points:
- Contribution. Does the percentage suit your sector and what your employees need?
- Franchise. The lower it is, the more of the salary counts towards accrual.
- Survivor's pension. Is the partner provided for if an employee dies, and is there an orphan's pension?
- Contribution waiver in the event of occupational disability. Does accrual continue if an employee falls ill and can no longer work?
- Costs and investments. How much of the contribution goes on costs, and does the investment policy suit the age of your employees?
If a scheme scores reasonably on all five points, you have an employment benefit you can mention in a job advertisement with confidence.
How do you set up a pension scheme? Step-by-step plan in six steps
- Check mandatory participation and the collective labour agreement. Based on your actual activities and SBI code.
- Set objectives and budget. What do you want to offer and what may it cost? Compare with competitors in your sector.
- Design the scheme. Contribution percentage, franchise (state pension offset), employee contribution, partner's pension, contribution waiver in the event of occupational disability, with or without freedom of choice in investments.
- Compare the market and choose a pension provider. At least three quotes, compared on costs, investment policy, service and portal.
- Document it. Administration agreement, pension regulations, amendments to employment contracts and the staff handbook. If there is a works council or staff representation body: request consent.
- Implement and communicate. Enrol employees, set up payroll, presentation and personal overview for each employee.
Common mistakes when setting up a scheme
- Skipping the bpf check and receiving a back-payment assessment years later.
- Selecting on the lowest contribution alone and forgetting the administration costs or the investment policy.
- Paying no attention to the survivor's pension, even though for employees with a family it is the most important element.
- Introducing the scheme without explanation, so that employees do not value the employment benefit.
- Setting up pension deductions incorrectly in payroll.
What does an independent pension adviser do for you?
An adviser with no ties to a pension provider carries out the bpf check, designs the scheme based on your budget, compares the market, checks the quotes and the legal documents and informs your employees. You pay a fixed price per phase or agree an hourly rate, and a combination of both is also possible. You are not billed through the contribution.
Frequently asked questions
How do you split the contribution between employer and employee?
There is no legal rule for this, unless your collective labour agreement or bpf prescribes a split. Often the employer pays the largest part and the employee a fixed share of the base. The employee contribution is deducted from gross pay before wage tax is calculated, so in net terms it costs the employee less than the gross amount. How to explain this is covered in Explaining gross and net pension to employees.
May an employer change or stop the pension scheme?
Not just like that. The pension scheme is an agreement with your employees. You can change it with their consent. Without consent, under Article 19 of the Pensions Act, it is only allowed if the pension agreement contains that power in writing and you have a compelling interest that outweighs the employee's interest. If you have a works council, it has a right of consent.
How long does it take to set up a pension scheme?
In my practice six to eight weeks, if decisions are made quickly. It takes longer if the works council needs more time, quotes are slow to arrive or payroll still has to set up the deductions. So choose a start date on the first of a month and work backwards.
Can a small employer set up a pension scheme?
Yes, even with a single employee. With few participants, watch out for minimum contributions and fixed costs per contract, which weigh more heavily per employee. A PPI or an insurer with a standard SME scheme is then often cheaper than a tailor-made one.
What do I have to tell new employees about their pension?
Within one month of their start, you let them know in writing or electronically whether you offer a pension scheme and, if so, from when and with which pension provider. This is set out in Article 7 of the Pensions Act. After that, the pension provider informs the employee about the scheme itself.
What if I currently have no pension scheme?
If your company does not fall under a bpf or collective labour agreement, that is allowed. Do let new employees know within one month that there is no scheme, so they know they need to save for later themselves. If you want a scheme later on, start at step 1 of the plan.
Pension adviser since 1990, Wft-certified (Dutch Financial Supervision Act) for pensions and income. Advises employers, works council members, DGAs and private individuals from Pensioenhart in Hoofddorp.
This article provides general information and is not advice for your specific situation. Amounts are indicative and based on 2026.
Figures and rules checked on 4 November 2026. Sources: Dutch government, Opbouw pensioenstelsel (consulted 4 November 2026); Pensions Act (Pensioenwet), Articles 7 and 19 (version in force from 1 January 2026); Dutch Tax Administration, V&A 23-014 Maximering compensatiepremie en compensatiebedrag (1 July 2023).
Read next: Future Pensions Act: what you need to arrange before 2028 · Explaining gross and net pension to employees
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