As of January 1, 2015, the maximum amount that an individual can contribute in their third pillar old age pension scheme will be reduced. In order to avoid possible taxation on the total pension accrual, companies need to ensure that their supplementary old age pension plan comply with the new rules.
The maximum amount of old age pension that an employee can accrue over their working lifetime will be reduced to 75% of their average salary over 40 years of employment. For the purposes of this accrual, the “pensionable” salary will be capped at Euro 100,000. For earnings exceeding the threshold of Euro 100,000, employees shall be able to make additional, tax-free savings into a separate annuity account.
Companies supplementary pension plans must be adjusted considering the reduced rate and salary threshold for the pension accrual in order to continue to qualify as a tax favorable pension scheme under the Dutch tax and pension regulations.