A new job and what about pension? Quite difficult for employees to keep an eye on their pension status. Yet it is important for old age. Especially when someone changes jobs. Transferring the old pension scheme to a new one with good pension agreements is very worthwhile. What to do when you start a new job with retirement?
Pension value transfer
Since July 1994, every employee who moves to another job has the right to transfer value of his pension. This means that he or she can transfer the value of the accrued pension rights to the pension fund of the new employer. There is a time limit for this. This is possible up to six months after an employee has started with the new employer.
Few people are thinking about retirement when they get another job
Research by the Netherlands Authority for the Financial Markets (AFM) has shown that few employees are concerned with their pension transfer if they get another job. Many people leave everything as is or opt for that transfer, simply because it is the easiest. However, this is not advantageous for their own position. Pension schemes are becoming less and less good and anyone who simply transfers their pension may reap the bitter fruits of this later.
As of January 1, 2011, it no longer has to be so difficult to gain insight into the accrual of pension. The pension register will then come into effect, where everyone can easily find their pension entitlements. On this Pension Register (the website www.mijnpensioenoverzicht.nl) everyone can see what pension they have built up, but also what their AOW rights are. The Pension Register also shows with which companies the pension has been accrued. Anyone who wants information can go there. To use the Pension Register, someone must have a Citizen Service Number and DigiD. Once that data has been checked, the data is then collected from the SVB, pension funds and insurers. It will take a little longer before calculations can actually be carried out with the Pension Register.
Make a comparison between old and new pension scheme
Someone who gets a different job and therefore a different pension scheme should first compare the two pension schemes. In about 40 percent of cases it is worthwhile to transfer value, but the remaining 60 percent would be better off demanding other conditions. It is best to request a quote for value transfer from the pension fund of the new employer. The quotation describes the accrued rights and both pension schemes. If it turns out that the new arrangement is better than the old one, then it is obviously a good idea to accept it.
Quotation for value transfer; points of interest
Yet this sounds simpler than it actually is. Because it also contains many things that are not very understandable for the average employee. Therefore, please pay attention to the following:
Type of pension schemes: average salary or final salary
The pension schemes differ in form from each other. It makes a big difference whether a pension is accrued according to the average salary or the final salary scheme. With the final salary scheme, the pension is determined by the salary that the person in question last earned. An average salary scheme is based on the average salary over a person’s entire career. In many cases, employees have started earning more and more. In that case, a final salary scheme is much better.
The partner’s pension is also very important, especially the accrual and timing of payment. If the agreements with the new employer are less favorable for the husband or wife of the person in question, the parental pension can be transferred. The partner’s pension cannot be transferred.
The indexation of the pension is also very important. This is the adjustment of the pension to inflation or price developments. There are pension funds that do this and others that do not. As of April 1, 2010, there is an indexation label that makes it clear how much a pension fund indexes. This system works with coins and if a pension fund has 4 coins, it indexes better than a fund with only 2 coins.
Anyone who finds the matter far too complicated (and he is) can also contact a pension advisor. After all, figuring out what the best pension is can yield a lot at the end of the day.