‘Employers are not pension advisers, but they can point employees in the right direction’

Pension funds and pension administrators are in the midst of a transition of unprecedented scale.  Yet pensions are not high on the agenda for many business owners. And according to Rosa d’Adelhart Toorop, they do not need to be. As the policy adviser responsible for pensions at VNO-NCW and MKB-Nederland, she represents employers in The Hague and across the pension sector. Her message is simple: let the reformed system work, take the burden off employers and help them direct employees with pension questions to the right place quickly.

The pension sector has many stakeholders, ranging from social partners, administrators and politicians to supervisory authorities. What is their specific role, what is their view of the sector, and how do they perceive and respond to the renewed system? In the Krachtenveld series, these parties share their perspective.

Discussions about employers’ role in pension matters often conjure up an image of large companies with HR departments and specialist pension advisers. But according to Rosa d’Adelhart Toorop, that is not the reality for most Dutch employers. In small businesses, many responsibilities fall to a single person. “If you have two people on the payroll, as a business owner you are finance, HR and head of sales all at once,” she says. Pensions are then just one of many issues requiring attention, d’Adelhart Toorop explains. “Small employers know they are affiliated with a pension fund and pay the contributions, but they rarely have in-depth pension knowledge.”

That reality also shapes how VNO-NCW and MKB-Nederland view the reformed pension system. In her national role, d’Adelhart Toorop works on legislation and regulations and consults with trade unions, pension funds, insurers and government ministries. At the same time, her priority is to give a voice to smaller business owners, who can easily be overlooked in discussions about the pension system.

The transition should not become a concern for business owners
In her view, the transition to the reformed pension system has progressed well so far. She does not see the relatively limited concern among employers as a sign of indifference; it shows that the sector is doing its job. “I certainly do not want business owners to lose sleep over the pension system transition on top of actually running their businesses. It is a good thing if we manage this within the sector and in The Hague, taking the burden off employers.”

Small employers in particular have other concerns. They need to serve customers, pay salaries and deal with staff shortages, sickness absence and issues such as electricity grid congestion. “The technical design of a pension scheme is far removed from those concerns. Concepts such as protective returns, the solidarity reserve or a solidarity-based defined contribution scheme are largely matters that go on behind the scenes for them.”

Greater certainty about costs
Nevertheless, the reformed system offers employers tangible benefits, d’Adelhart Toorop explains. In her view, the most important is contribution stability. “Under the old system, contributions could rise sharply due to changes in factors such as interest rates. For businesses with large workforces and narrow margins, that could have significant consequences. The reformed system gives employers greater certainty about their pension costs. It is also better suited to a labour market in which people change jobs and sectors more frequently or work as self-employed professionals for a period. The old system of uniform contributions and pension accrual was based on employees spending much of their careers with the same employer or in the same sector. That reality has changed.”

This also calls for a less abrupt transition from work to retirement. At present, it often still means working full-time one day and being fully retired the next. D’Adelhart Toorop advocates greater scope to reduce working hours gradually. “The path towards retirement would be less like a cliff edge and more like a gentle slope. Employers and employees could then consider together what the employee can manage, what they want and what is possible. And yes, many of these options already exist, such as partial retirement or bringing forward or postponing the retirement date. But within small and medium-sized businesses in particular, these options are often still unfamiliar.”

Employers as guides
This does not mean that employers should now become pension advisers. Quite the opposite. According to d’Adelhart Toorop, technical questions about an individual’s pension situation should be addressed to the pension fund or pension administrator. Employers can, however, help employees find the right information. “An employer can point an employee in the right direction. That might be the pension fund’s member portal, a telephone helpdesk or Mijnpensioenoverzicht.nl. That signposting role is important, because employees do not always know which fund or insurer holds their pension.”

This also presents a clear task for pension funds, she says. Employers should be able to find and use practical information without having to write their own texts or pay for external advice. “Think of template letters, clear explanations and specific answers to questions such as: can I retire early, reduce my working hours or start drawing my pension later?” After all, the employer’s main concern is: I have an employee with a question. Where can I direct them, and how can I make sure they get help? Digital services can make a significant difference here, particularly when a business owner handles personnel matters in the evening or at weekends. “But technology should not be the only point of contact. If a business owner gets stuck, does not know the right terminology or cannot find a suitable answer, someone needs to be available to help.”

Trust starts with being accessible
Being accessible also helps build trust in pension funds. Although d’Adelhart Toorop believes that trust is generally strong, it can come under pressure when communication becomes harsh or difficult to understand. This can happen, for example, in discussions about whether a business is required to be affiliated with an industry-wide pension fund. “At moments like these, what matters is not just whether a fund is legally in the right, but also how an employer is approached. Clear explanations, accessibility and an understanding of a small business owner’s circumstances can prevent an administrative issue from turning into distrust of the system.”

VNO-NCW and MKB-Nederland play a connecting role in this respect. Many of their members are industry associations, which in turn receive feedback from individual business owners. When an issue is more widespread or relates to legislation and regulations, d’Adelhart Toorop brings it to the attention of the Ministry of Social Affairs and Employment (SZW), the umbrella organisations for pension funds and pension insurers, and the trade unions. In this way, various outstanding issues in pension legislation have been addressed in recent years. This role of identifying concerns and representing employers’ interests remains necessary when new questions arise, such as the possible extension of mandatory pension provision and the precise scope of employers’ duty of care. D’Adelhart Toorop: “For employers, the key issue is how responsibilities for pension choice guidance are divided. Who helps employees with questions about early retirement, partial retirement or, in future, taking a lump sum, for example? Not everything has been fully clarified yet. But one thing is clear to me: the solution cannot be to expect every small business owner to become a pension expert.”