“Having no pension scheme is a no-go on the labor market”

Published on: 20 October 2020

Pension is an important factor when people are looking for a new job. However, people often don’t know how the pension scheme offered looks like exactly, as evidenced by the National Survey on Employment Conditions. Joyce Augustus-Vonken was involved in the survey from APG: “Employers have to make their employees more pension-aware.”


We work for our pension at least one day per week, but, oddly enough, we are barely aware of that fact. Yet, we believe a good income for later is important: we are hesitant to pick an employer not offering a pension scheme as shown by the National Survey on Employment Conditions. APG conducted the research together with Intermediair, a work-life platform for those with a higher education, among about 7000 people; employed people and jobseekers. Joyce Augustus-Vonken, researcher at APG, spent a lot of time on the survey these past months, together with colleague Eduard Ponds. A big job that provided plenty of insights on how important pension is considered by the Dutch in the total package of employment conditions and what they know about the topic.

Why did APG conduct this survey together with Intermediair?

“At APG, we are eager to know how people think about their income for now, later on and in the future: what do they perceive as important, what are the choices they make? That knowledge enables us to respond more effectively. This survey specifically involved Dutch people who are working and who are looking for a job. Pension is an important employment condition. Employers pay an average of two-third of the premium for their employees, some pension funds even pay the total amount, but in some cases employers pay less than half. We were curious to know if people actually pay attention to the above details when looking for a new job or in their current job. Are they aware of the value of this employment condition and of the differences between pension funds?



“The salary continues to be the most important employment condition which is only logical. But pension also appears to be an important factor when making the choice for a new job. No less than 92 percent of the employees and jobseekers expects their employer to arrange the pension accrual. Conversely, the lack of a pension scheme contributes largely to the decision on whether or not to opt for such employer. The same applies to no perspective of a permanent contract for that matter. Not offering these employment conditions therefore truly is a no-go for employers.”


Should the employers offering a good pension scheme emphasize this more on the labor market?

“Employers can highlight their pension scheme more in job ads and during the application process, but also to their existing employees. Conversely, employees could also raise the topic of pension more actively in job interviews and conversations on employment conditions. And not only ask the question whether or not a pension scheme is available, but also the height of the pension and how much premium he/she and the employer are actually paying on it. Because that is also showing from the survey: people find it important to actually accrue pension, but the height thereof seems to be of lesser interest. Most people are quite happy with a pension that pays 50 percent of their current gross monthly salary in the future. Higher pensions contribute to the attractiveness of the package of employment conditions, but the higher the pension, the less added value people relatively allot to it. That mainly applies to an increase of the pension from 70 to 90 percent of the gross monthly salary: in that case, people often perceive adjustments in other employment conditions as more important. Even though that could make a considerable difference in the pay-out later on.”


The survey also shows poor knowledge on pension. Is that related to the above?

“Nearly sixty percent of the respondents does not know what part of the premium is paid by the employer. Also remarkable: almost half of the interviewees don’t know whether they will receive a fixed or variable pension payment. People perhaps think too often: I am accruing pension and this means everything is well arranged. They rarely wonder whether they will have enough income later on, or that’s it is time for them to arrange something extra. Women appear to be less knowledgeable on the situation of their pension compared to men.”

Almost half of the interviewees don’t know whether they will receive a fixed or variable pension payment

Does that have to do with the fact that women work part-time more often? Or do men just say that they know the ins-and-outs, even when that’s not the case, while women are less convinced about their pension knowledge?

Laughing: “That was not in scope while conducting the survey. That could perhaps be a great subject for a follow-up survey.”


Does the survey also show differences between older people and young people?

“Older people are often more informed about their pension than younger people. They also responded differently to the choices we presented them, such as the choice between 15 percent additional salary or 40 percent additional pension. Overall, approximately half of the respondents would opt for additional salary and about half for additional pension. You see a difference when you zoom in on the young and the old. Nearly 60 percent of the young people would opt for that 15 percent more salary as opposed to only 40 percent of the older people. This is only logical: older people are closer to their pension, while it is still far away for the young people.”


What was the outcome of the survey that was most surprising to you?

“The major importance people attach to flexible working and a work-life balance. 60 percent would be prepared to accept an additional salary cut of 15 percent and an additional pension cut of 40 percent to achieve this, provided that pension is still accrued. The interesting part is that this applies across the board, although women and higher educated people slightly more often favor a package of work-life balance rather than a financially more attractive package. This means people are prepared to make substantial concessions in order to gain time more for themselves and the family. 40 percent more or less pension: that makes a big difference. The question is whether people sufficiently realize the consequences.”


Has that outcome been affected by the fact that many people were working from home during the survey?

“That could well be the case: during the time of corona people perhaps noticed the importance of a good work-life balance. People may possibly also attach more value to a permanent contract as a result of the increasing job insecurity caused by the crisis.”

What can employees and employers do in practice utilizing the results of this survey?

“We summon employers to make their employees more pension-aware: don’t only look at the income now, but also at the income in the future. One in five people say they don’t even know whether or not they are satisfied with their pension accrual. So, the knowledge on pensions has to increase. Employers could possibly also build in more freedom of choice between salary, flexible working and pension. And, as said, pension can be leveraged as an advantage in a competitive labor market. Make it clearer what value you are offering in terms of pension and the other employment conditions, because the latter are also not known to everyone, so it appears. This could represent a missed opportunity for employers to create more satisfied employees.”


Finally, you also looked at job satisfaction. How important is that?

“60 percent says to be satisfied with the current job. The most important reasons: challenging work and nice colleagues. A good atmosphere and the salary are listed at a shared third position. Job satisfaction therefore appears to be more important than the secondary employment conditions. But that’s only natural. You are engaged in your work every day, so it is important to also enjoy yourself. That cannot be beaten by salary or pension.”