mast image

Special Report

ESG: The metrics jigsaw


Employer pain warning on Dutch executive pensions tax

Related images

  • Employer pain warning on Dutch executive pensions tax

NETHERLANDS - Employers with businesses in the Netherlands might need to adjust their executive pension arrangements if Dutch lawmakers approve additional tax restrictions backed by the government, Towers Perrin has warned.

The consultant today said under the proposals, which are currently under review in the Dutch second chamber, some employers may need to cap pensionable pay under their final salary plan at €500,000.

The legislation, scheduled to be introduced in January 2010, requires employers operating a final-salary pension scheme to pay a new tax of 15% on four times the amount of pensionable pay for executives making more than €500, 000, which will be indexed annually.

Rene Overtoom, a pension lawyer with the consultant in Amsterdam, told IPE he expects the law to win approval by the end of this year.

As a result, he suggests employers should start listing how many employees would fall under the arrangement, and approach them to arrange a deal, since this is a tax that is payable by the employer.

"The employer could split the arrangement and use a final-pay plan up to the maximum of €500,000, and everything that comes above that could be put into a career average system or a money purchase scheme," said Overtoom.

The measures are part of a wider initiative, announced in March this year and to be rolled out from next year, to encourage employers to cap severance and retirement packages for highly-paid executives.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email

Have your say

You must sign in to make a comment


Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2575

    Asset class: Core Real Estate Muli-Manager Separate Managed Account.
    Asset region: Global.
    Size: CHF 150m.
    Closing date: 2019-12-20.

  • QN-2578

    Asset class: Sovereign Local Currency Emerging Market Debt.
    Asset region: Local emerging markets.
    Size: EUR 950m.
    Closing date: 2019-12-19.

  • QN-2582

    Asset class: Emerging Market Corporate Debt Hard Currency Investment Grade.
    Asset region: Emerging Markets.
    Size: USD 40 – 60 m.
    Closing date: 2020-01-07.

Begin Your Search Here