Doing Business in the Netherlands 2012 - American Chamber of ...

Doing Business in the Netherlands 2012
insurance.) The second-tier pensions are financed by
contributions paid by the employer to the pension provider.
These contributions may be shared between the employer and
employee. There are many ways in which the second-tier
pension benefits can be arranged (see sections 15.6.1 up to
15.6.8).
c) The third tier of the Dutch pension system consists of private
insurance for the employee’s salary that is in excess of the
second-tier benefits.
Subject to detailed tax legislation, second tier and third tier pension
contributions are not classified as taxable wages and can in principle
be paid to the pension provider (pension fund or insurance company)
free of payroll taxes. The later payments to be received by the
employee upon retirement will subsequently be taxable for personal
income tax purposes.
15.6.1 Second Tier
On January 2007, the Dutch Pension Act came into force and replaced
the former Dutch Pension and Savings Fund Act. These acts
described conditions for the second-tier pension. The Pension Act,
however, offers more clarity about responsibilities and liabilities
between the employer, the employee and the pension provider.
In principle, employers are not obliged to provide for pension, unless
contractually agreed upon or a government initiative so requires. The
latter applies if the employer falls within the scope of a mandatory
Industry Wide Pension Fund (Verplichtgesteld
Bedrijfstakpensioenfonds, BPF) which applies for an entire branch
(industry). Please be informed that based upon the Dutch Pension
Act, an employee who forms part of a group of employees (which
group has offered a pension plan of the employer) will be considered
to have offered the same pension plan, unless explicitly agreed on
otherwise with the employer.
Baker & McKenzie 139