Setting up a pension scheme for your employees: step-by-step plan and costs
A good pension scheme retains talent, costs on average ten to twenty percent of the payroll and can be arranged within six to eight weeks if you follow the right steps. This article shows you which ones.
Are you obliged to offer a pension scheme?
Not every employer is obliged to, but many employers wrongly assume they are exempt. First check two things:
- 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.
If neither applies to you, you are free to offer a scheme or not. Please note: 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 does a pension scheme cost the employer?
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: the salary minus the franchise (state pension offset), the part already covered by the state pension (AOW).
Worked example (indicative). Ten employees with an average salary of €45,000 and a franchise of approximately €19,000 have a pensionable base of around €26,000 per person. At a flat contribution of 12 percent, that is €3,120 per employee per year, around €31,200 in total. Add to that risk premiums and administration costs, usually a few hundred euros per employee. An employee contribution reduces the employer's costs.
For tax purposes, the contribution may be as high as 30 percent of the pensionable base. In practice, SME employers often choose between 8 and 15 percent, depending on the sector and the labour market.
Step-by-step plan in six steps
- Check mandatory participation and the collective labour agreement. Based on your activities and SBI code (Dutch standard industrial classification).
- 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.
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.
Read next: Future Pensions Act: what you need to arrange before 2028 · Explaining gross and net pension to employees
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