Fixed Personal Pension Benefit

Characteristics of the fixed benefit pension

• The amount of your pension benefit is fixed from the time you buy it. So you have complete certainty about your pension benefit.
• We do not invest your pension money for you, so you run no investment risk.
• When we determine the amount of your fixed pension benefit, we take into account the interest rate and the average life expectancy of Dutch people at that time. If the interest rate or the average life expectancy changes after you buy your pension benefit, this will not affect the amount of your benefit.
• If you accrued capital for a temporary retirement pension, such as a pre-pension or temporary bridging pension, you can buy a temporary fixed pension benefit for it. In all other cases, your fixed pension benefit is lifelong. It does not matter how old you become.
• You can buy a partner’s pension in addition to a pension benefit for yourself. Your current partner will then receive a benefit if you die after purchasing your pension benefit. The level of this partner's pension is also fixed from the time you buy your pension benefit.

Your choices for the fixed pension benefit

If you opt for the fixed personal pension benefit, you have three choices to adjust the benefit to your needs.

Retirement date: retiring earlier or later

The pension scheme regulations of your employer include a certain retirement age. If you make no other choice, your pension benefit will start on the first of the month in which you reach this age. In other words, this is the retirement date of your pension scheme. However, you can also choose to retire earlier or later.

Remember: the retirement age in your pension scheme regulations may differ from the age at which you receive the Dutch state pension.

If you prefer to retire later, you can do so in two ways with the fixed personal pension benefit. It is important to understand the advantages and disadvantages before making your choice. We will be happy to explain both deferment methods for you. If you have any questions about this, please contact your Pension Coach: he or she will be happy to answer your questions. The contact details can be found in the contact block at the top right of this page.

‘Buying a deferred pension’
You buy your pension benefit on the retirement date of your pension scheme. But you have the benefit commence later. This is how it works:

• You can now defer the commencement date of your pension benefit by up to one year. After that year, you can again defer the commencement date for up to one year, etc. The later we start paying your pension, the higher your pension benefit will be.
  Remember: you cannot have your life-long benefit commence later than five years after your state pension date. This is enshrined in law. If you have a temporary retirement pension, check your pension regulations to see the final starting date.
• You can buy only a fixed pension benefit. If you choose ‘buying a deferred pension’, you will not be able to buy a variable benefit with us investing for you.
• However, you can choose between a fixed benefit that remains the same (‘constant’), or that is higher in the first few years and lower thereafter (‘high-low’). The choice between constant and high-low is made only when you decide to have your pension benefit commence.
• We calculate the amount of your pension benefit with the interest rate applicable on the purchase date. Between the purchase date and the commencement date of your pension benefit, changes in interest rates and any investments do not affect the amount of your benefit.
• If you have accrued pension with a promise of a partner’s pension after the retirement date, and you die before your own pension benefit commences, your partner will be entitled to a benefit. This payment to your partner is 70% of the amount of your own pension benefit if you do not defer it. If you do not want a partner’s pension or you want a lower partner’s pension, you can make that choice when you let your pension benefit commence.
• If an orphan's pension and/or occupational disability pension was insured in your pension scheme before your retirement date, this usually no longer applies from the time that you buy the pension benefit. If you become occupationally disabled in this case after this date, you will not be entitled to an occupational disability pension. If you die in this case after this date, your children will not receive an orphan’s pension. Your pension regulations state what retiring later means for any orphan’s pension and occupational disability pension.

Once you have bought a pension benefit with your pension capital, you can no longer buy a benefit for this pension capital elsewhere (‘shopping’).

‘Postponing pension capital’
You do not purchase a pension benefit on the retirement date of your pension scheme. You buy the benefit only when you want your pension benefit to start. This is how it works:

• You can defer buying your lifelong pension benefit until the date on which your state pension starts (if it starts later). After your state pension has started, you can (again) defer buying your pension by a maximum period of one year. Towards the end of that period, we will ask you if you wish to buy your pension benefit or defer it for another year at the most, etc.
  Remember: you can defer the purchase of your lifelong pension benefit for up to five years after your state pension has commenced. This is enshrined in law. If you have a temporary retirement pension, check your pension regulations to see the final starting date.
• Your pension capital remains with the pension provider of your employer's scheme until you use it to buy a pension benefit. Until then, you may still run investment risk and interest rate risk. The pension provider of your pension scheme can tell you exactly what happens to your pension capital.
• We calculate the amount of your pension benefit only when you buy it, using the interest rate that applies at that time. Between the retirement date of your pension scheme and the time when you buy the benefit, the interest rate may increase or decrease. An increase is positive for the amount of your pension benefit, a decrease is negative.
  All options are still open when you buy the pension benefit. You can then, for example, make choices for a partner’s pension. And you can still choose whether you want a higher fixed pension benefit in the first few years and a lower one thereafter. You can also opt for a variable pension benefit (with investments), if this suits you.
• Remember: on the retirement date of your pension scheme, the partner’s pension may automatically end in the event of your death before your retirement date. Check your pension regulations to see what later retirement means for the partner’s pension in the event of your death between the retirement date in the scheme and the time when your pension benefit starts.
• If an orphan’s pension and/or occupational disability pension was insured in your pension scheme before your retirement date, read in your pension regulations what later retirement means for these insurance policies. These insurance policies may end on the retirement date of your pension scheme. If you become occupationally disabled after this date, you will not be entitled in that case to an occupational disability pension. If you die after this date, your children will not receive an orphan's pension in this case.

As long as you have not yet purchased a pension benefit, you can still choose to do so with another pension provider (‘shopping’).

Additional requirement when postponing a temporary pension benefit
If you want to ‘buy a deferred pension’ or ‘defer your pension capital’ for a temporary pension benefit, an additional requirement may apply.

• If you have accrued pension capital for a pre-pension, you can according to law buy or have your benefits commence later if you are still working. It does not matter whether you are in the service of an employer or self-employed (zzp). If you choose to have your benefits commence later, you must send a statement that you are still working. You can draw up a statement yourself. You can also use the form that we will send you when you make this choice.
• If you have accrued pension capital for another temporary retirement pension, you do not have to continue working if you want your benefit to start later.

You can see which type of temporary retirement pension you have in the pension regulations of your pension scheme.

Partner's pension if you die

If you die after your pension benefit has started, your benefit will stop. If you have a partner, your partner will also lose income. You therefore purchase a partner's pension by default for your current partner at the same time as you purchase your own pension benefit. Your partner will then receive a lifelong benefit in the event of your death. The partner's pension is a certain percentage of your pension benefit. This is 70% by default.
But you and your partner can also make a choice other than the default option. You can choose to:

• buy a lower partner’s pension. This is 35% of your pension benefit. As a result, your own pension benefit is somewhat higher.
• not to buy a partner’s pension. Your own pension benefit will be higher as a result.

Your partner must agree to your choice of a lower or no partner’s pension. Discuss this choice seriously with your partner. If you do not have a partner, you do not need to purchase a partner’s pension and your own pension benefit will be higher.

A higher benefit for the first years (‘high-low’)

You can choose a fixed pension benefit that remains the same (‘constant’). You can also choose to receive a higher benefit in the first few years. After that, you will receive a lower benefit (‘high-low’). You choose how many years you want a higher benefit, between one and ten years. When your pension benefits start, you will know the amount of both the higher and lower benefits.
High-low can be attractive if you expect to need more money in the first few years. For example, because your mortgage is not yet paid off. Or because you think you will be more active in the first few years and want to be able to spend a little more.

Your choice for a constant benefit or for high-low has no effect on the level of any partner’s pension. We calculate the level of the partner’s pension (70% or 35% of your pension benefit) as if you were buying a constant pension benefit. In paying out the partner’s pension, it is always an constant benefit.

You can read more about the choices you can make for your pension benefit on the page Choices for your pension benefit.

Lump sum on retirement date

Soon you may have a new choice when you retire. You can then receive part of your retirement pension in one go: a ‘lump sum’. With that money, you can do what you want. But if you choose a lump sum, your lifetime pension benefit will be lower. This new option will probably enter into force on 1 January 2023. That depends on when exactly the relevant law is passed.
How does this work exactly and what do you need to consider? And can you opt for a lump sum if you are retiring soon? We tell you all about it on the page Choices concerning your pension benefit.

Risk of your fixed pension benefit

After you have bought the pension benefit, you run an inflation risk with the fixed pension benefit. Normally, prices rise slowly in the Netherlands. This is known as inflation. It means that in five years’ time, you will be able to buy less for € 100 than you can today. So in five years’ time, you will need more money to buy the same thing. But your pension benefit will not increase. You run the risk of being able to buy less from your benefit after a few years.

The amount of your fixed pension benefit

The level of your fixed pension benefit depends, for instance, on:

• Your choices for partner’s pension and for a ‘constant’ or ‘high-low’ benefit. These choices are described under the tab ‘Choices’.
• Your pension capital. With the pension money that becomes available on your retirement date (‘pension capital’), you buy your own pension benefit and possibly a partner’s pension. The higher the pension capital, the higher your benefit.
• The interest rate. We calculate your pension benefit with the current interest rate. This is the interest rate that applies at the time we make your quotation. The higher the interest rate, the higher your benefit. The interest we use to calculate is based on the market interest rate published by the Dutch Central Bank.
• The rate: when calculating your fixed pension benefit, we are obliged to use certain rates to avoid unequal treatment between men and women. A rate can be gender neutral (the same for men and women), gender dependent (different for men and women) or a combination of the two. Which rate we use depends on the pension scheme via your employer.
  When determining the rate, we also take into account the life expectancy of the average Dutch person on your retirement date (or the date on which you buy your deferred pension, see under the tab 'Choices'). The Dutch are probably going to live longer on average. Consequently, the pension money has to be divided over more and more years. The higher the average life expectancy on your retirement date (or the date you buy your deferred pension), the lower your pension benefit.
• The costs. Nationale-Nederlanden charges costs for administration and payment of your pension benefit, etc. You can read more about this under the tab ‘Costs’.

Do interest rates and average life expectancy change after you buy your pension? This has no effect on the amount of your fixed pension benefit.

Tax and premiums

We calculate your pension benefit as a gross amount. But we pay your benefit net. This is because when you retire, we are legally obliged to withhold wage tax from your gross benefit. In addition to wage tax, we also deduct the income-related contribution for the Dutch Healthcare Insurance Act from your gross benefit. The deductions do not take into account the wage tax deduction.

What you pay for your fixed pension benefit

We charge administration fees for our services. These include the monthly payment of your pension and the costs we incur to inform you about your pension benefit.

We deduct the administration fees on a one-off basis from your pension capital. So you will never have to pay these costs again. From the amount that remains, we calculate your fixed pension benefit. You will find the exact amount of the administration fees in the quotation.