The employer may, in consultation with the representative body, choose from the contract types permitted under the new pension system, i.e. the joint and several liability contract, the flexible contract, and the contribution administration agreement. A pension administrator can be freely chosen. If a pension fund is involved, any request to convert will be included in the transition plan.
As of 1 April 2024, the level for the flat contribution is set at 17% of the pension base, excluding risk premiums and administrative fees. As of 1 January 2028, the level of this flat contribution will be 18% of the pension base, excluding risk premiums and administrative fees. The minimum tax deductible applies.
The employer may, in consultation with the representative body, also choose to apply the newly introduced flat contribution to existing employees. In that case, a compensation issue may arise. The transition to the new pension system with a flat contribution rate is subject to the condition that employers at least adopt budget neutrality as their starting point on the transition date. The employer must provide adequate compensation. Any compensation will be offered as standard (within the maximum tax limits) in the form of pension contributions. Employees may be given the option to use this compensation for purposes other than pension.