This is part of it and you want to ask yourself these questions.
A retirement plan is considered the most valued fringe benefit by remote workers, according to research from job site Indeed.
It is therefore important to pay a lot of attention to this. But what should you pay attention to if you want to draw up or change such a scheme?
A pension scheme is no longer a one size fits all, notes Myra van Herwijnen, Employee Benefits manager at VLC & Partners, a partner of Aegon Cappital. “Pension schemes were once built with the idea that as an employer you want to take good care of your employees. That is still the case, but you can now interpret the care concept in a different way. There is more room for customization.”
She points out that it has been agreed in the pension agreement that from 2027 there will only be one type of pension scheme: the defined contribution scheme. In the run-up to this, important choices must be made that can affect employees in various ways.
Start on time
In order to be able to make the right choices that suit the company and the employees, it is important to start on time.
But what is timely? “How long the process takes depends on the size of the company. Many companies revise their pension plan on January 1, when the pension contract expires. In that case, you have to take the first steps from March of the previous year.”
It is also very important for the elaboration of the pension agreement to start on time. Research commissioned by Aegon Cappital shows that few companies are actively preparing for the new situation. However, it is very important to start this early. It is not necessary to wait until all the details of the pension agreement have been worked out.
Although every company is structured differently, the process to arrive at a good pension scheme is broadly the same, says Van Herwijnen. She formulates seven steps that must be taken.
Step 1: testing with the employees
Many decisions about retirement are taken top-down. Van Herwijnen: ”While it is extremely important that you have support for your plans. In many cases, the approval of the Works Council (OR) is even required.”
She therefore advises entrepreneurs to make an inventory of the needs of their staff. These can be quite different. “Younger employees are less concerned with their income for later. They often have high fixed costs, such as a mortgage and costs for childcare, and would prefer a little more financial space now.”
Older employees, on the other hand, have often already built up a fairly good pension, she continues.“This not only provides valuable insights, but also helps to create pension awareness. Many employees do not think about it.”
Van Herwijnen recommends that you also include the education and knowledge level of your employees in your scheme. “If you build in more flexibility, your employees have to make more choices. But are they also able to foresee the consequences of this? Consider whether extra flexibility would suit your organization.”
Step 2: formulate a goal and vision on pension
If you have an idea of the wishes of employees, you have to think about what you actually want with your pension scheme as an employer, says Van Herwijnen. “How do you view retirement? And how does that fit within your total package of employment conditions?”
In her experience, companies can look at this differently. “There are companies that regard the pension scheme as something with which they can profile themselves as an employer. They want to use it to attract new talent or to retain existing talent. Other companies mainly want to take good care of people: offering a good pension that gives employees financial space. And still other companies opt for a more sober arrangement, because they prefer to profile themselves in a different way. The vision you have determines the final arrangement.”
Step 3: pension advisor makes an analysis and makes a proposal
Once you have mapped out your vision and the wishes of your staff, a pension advisor will determine the frameworks. “He or she makes an inventory of the budget and risk appetite and checks whether the company is covered by a collective labor agreement or industry pension fund,” says Van Herwijnen.
The pension advisor then outlines the contours of the new pension scheme and checks the wishes against the legal frameworks. “Of course you have to know whether the plans are also legally possible,” explains Van Herwijnen.
Finally, the pension advisor examines which product and which insurer best suit the choices made and issues advice on this.
Step 4: discuss with the Works Council (OR)
If you make a new arrangement or amend the existing arrangement, the consent of the Works Council is always required by law. “In order to make the transition go smoothly, it is wise to involve them at an early stage and not to wait long,” advises Van Herwijnen.
Step 5: Sign quotation and enter regulation
After the green light from the Works Council, you can start implementing the scheme. The pension advisor checks whether everything is correct as discussed.
Step 6: manage the scheme
Every pension scheme requires maintenance, emphasizes Van Herwijnen. “In the event of major changes, it is wise to re-examine the pension scheme.What she thinks also helps enormously is to provide additional explanations in one-on-one conversations with employees. Does a scheme offer a lot of flexibility? Then help them make good choices. These kinds of conversations won’t make retirement sexy anytime soon, she admits. “But given the importance of a good pension scheme, it is your job as an employer to ensure more pension awareness.”
About Aegon Cappital
Aegon Cappital is Aegon’s premium pension institution (PPI). We have been active in the pension market since 2012. Aegon Cappital helps you and your employees think ahead when it comes to retirement. We now do this for more than 5,600 satisfied employers and more than 270,000 employees. Also a pension provider who thinks ahead with you? Look at www.aegoncappital.nl.
This is an article from our future-oriented employer series, powered by Aegon. As an employer, you want to arrange things well for your employees. Aegon and Business Insider are happy to help you with that. By pointing out obstacles and opportunities in good time. And by offering the right products and services, such as an Aegon Cappital pension plan.