Dutch Plan Sponsors Urged to Review Employment Contracts Following State Pension Age Increase
13 July 2012 (PLANSPONSOREurope.com) – Plan sponsors in the Netherlands should check the employment contracts of their workers to see whether dismissal in case of retirement is linked to the state pension age, Kristel Kusters, Mercer’s DB Risk Leader for the Netherlands has told PLANSPONSOR Europe.
This week the Telegraaf reported the Dutch pension age is to increase in stages to 66 by 2019 and then go up to 67 in 2023. The legislation was approved by both houses of parliament.
Kusters told PLANSPONSOR Europe that plan sponsors now need to review the employment contract to check what is in it regarding the dismissal in case of retirement.
“Sometimes there is a direct link between the state pension and the dismissal in case of retirement in the employment contract. In other contracts, it can state it is 65 or it is linked to the retirement age in the pension plan .
“If the dismissal in case of retirement is not related to the state pension, employees can still claim to work until commencement of the state pension. These contracts have to be reviewed.
“Employees that become 65 in 2013 have probably planned their retirement for a long time, and might want to leave when they become 65. You would then have the question over whether the company wants to compensate for the lack of State Pension in the first month .”