Future Pensions Act: what you need to arrange as an employer before 1 January 2028
The Future Pensions Act (Wtp) is not a pension fund problem but an employer decision. You choose a scheme, set the contribution and the compensation, need the consent of the works council and must demonstrably inform your employees. This article sets out the choices and the deadlines.
In brief. The Wtp has been in force since 1 July 2023. By 1 January 2028 at the latest, every pension scheme must be a defined contribution scheme with a contribution that is the same for all ages. Average-salary schemes will disappear and age-dependent contribution scales will be phased out. Allow six to twelve months of lead time.
What changes under the Future Pensions Act?
Until the Wtp, most employees built up their pension in an average-salary scheme (a fixed benefit for each year worked) or in a defined contribution scheme with an age-dependent scale: the older the employee, the higher the contribution. Both will disappear. From the transition date, the following applies:
- Defined contribution schemes only. The employer pays in a contribution and the employee builds up personal pension capital that is invested. The amount of the pension is no longer fixed in advance.
- A flat (age-independent) contribution for new employees. The same percentage of the pensionable base for every age. The tax-approved maximum is 30 percent of the pensionable base.
- Entry age 18 instead of 21.
- New survivor's pension. The partner's pension on death before the retirement date is insured on a risk basis, at a maximum of 50 percent of salary, regardless of the number of years of service. The orphan's pension continues until age 25.
What does the Wtp mean for you as an employer?
Four decisions you cannot leave to the pension provider:
- Which scheme? With an insurer or a premium pension institution (PPI) you choose a flexible defined contribution scheme, optionally with a fixed benefit from the retirement date. With a pension fund, the fund chooses between the solidarity-based and the flexible defined contribution scheme.
- Which contribution? A flat percentage that fits your budget and what employees are currently building up. For younger employees a flat contribution is more favourable; for older employees it is often less favourable.
- Which compensation? Employees who are worse off as a result of the transition must be adequately compensated.
- How do you involve the works council and employees? The works council has a right of consent under Article 27 of the Works Councils Act. Employees must understand what is changing; in most situations you set this out in a transition plan and a communication plan.
Transitional law: grandfathering (eerbiedigende werking)
Do you currently have a defined contribution scheme with an age-dependent scale? Then you may continue it for existing employees. This is known as grandfathering (eerbiedigende werking). Only new employees who join after the transition date receive the flat contribution. You then run two schemes side by side, which requires extra attention in administration and communication.
Do you have an average-salary scheme with an insurer? Then there is no automatic grandfathering. Have it assessed in good time which transition route is still open for your scheme; this determines the compensation you will have to pay.
| Current scheme | What happens | Point of attention |
|---|---|---|
| Defined contribution scheme with age-dependent scale (insurer or PPI) | Continuing it for existing employees is permitted; new employees receive a flat contribution | Two schemes side by side; equal treatment must be justified |
| Average-salary scheme with an insurer | Must be converted to a defined contribution scheme | Compensation for older employees; the value of accrued entitlements is retained |
| Affiliated with a mandatory industry-wide pension fund | The fund carries out the transition, including any conversion of accrued rights (invaren) | The employer has little choice, but does have a duty to inform |
Step-by-step plan and deadlines up to 1 January 2028
- Inventory (month 1). Current scheme, administration agreement and end date, bpf and collective labour agreement check, workforce by age and salary.
- Analysis (months 2 and 3). Calculation of current versus new accrual per employee. Scenarios for the flat contribution and the compensation. Determining the level of the survivor's pension. Budget decision by management.
- Advice and choice of pension provider (months 3 to 5). Market research, comparing quotes, making a choice. Draft pension regulations.
- Works council consent (months 5 to 7). Request for consent with explanatory notes, round of questions, possibly an independent adviser for the works council.
- Implementation and communication (months 7 to 10). Signing the contract, setting up portals, adjusting payroll, presentations and personal overviews for employees.
Why not wait until 2027? Insurers and PPIs schedule implementations months in advance. Those who start late get less choice of pension providers, less room to negotiate and a works council that has to decide under time pressure.
Role of the works council and communication to employees
The works council can only give its consent once it understands the proposal. So give the works council a role early on: inform it during the analysis phase, have the draft reviewed and offer an independent explanation. Then the employees: a presentation at the start, a personal overview of old versus new and a drop-in session for individual questions. This turns a legal obligation into an employment benefit that employees value.
Frequently asked questions
Does the Wtp also apply to small employers?
Yes. Every pension scheme in the Netherlands must comply by 1 January 2028 at the latest, regardless of the number of employees.
What happens to the pension that has already been accrued?
With an insurer, the accrued pension remains in place as a paid-up entitlement, or it is combined with the pension still to be built up. With a pension fund, the fund may decide on conversion (invaren): converting the old entitlements into personal pension capital.
Do I have to compensate if I use grandfathering?
Nothing changes for existing employees in that case, so no compensation is needed. You must, however, be able to explain the difference with new employees.
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 and percentages are based on the legislation as known in 2026.
Read next: Setting up a pension scheme for your employees · Explaining gross and net pension to employees
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