Why young companies do not mention pensions in vacancies
Nearly a million people in paid employment do not have a pension plan. Most of these are people under 35. Retirement is the last thing on the minds of many young employees. For the older generation, a good pension plan was one of the main employment conditions, but this no longer seems to be the case. In job openings ads, pension plans are barely even mentioned. Not even if the company does offer a good retirement plan.
“When you work full-time in paid employment, you’re working, on average, one day a week for your pension.”
Online supermarket Crisp summarizes the advantages of working for the company in a job opening ad for a Commercial Analytics Manager. “Competitive salary with opportunity to obtain a share in Crisp.” “Fun Friday afternoon drinks, events and tasting sessions.” “A challenging environment with big responsibilities.” “The opportunity to contribute to the construction of a company that is going to change the food system in Europe.” The word “pension” is nowhere to be found.
And Crisp is not the exception. Leaving out any mention of a pension plan has been more the rule than the exception in personnel ads the last few years; especially among “young” companies. For the startup Crisp, that is a conscious choice, says CFO Michiel Roodenburg, because the plan is still being developed. “We have been in operation for two years now, and we are still researching what kind of pension fits in best with our company. We are convinced that pension is an important way to reward and motivate our “crispies” and to express our appreciation, but it is a complex subject that we want to think about very carefully. Once you’ve chosen a particular pension plan, it’s not easy to revise it.” But even when the plan is complete, Roodenburg doesn’t think it will be a subject that gets mentioned in job ads. “It needs to be there, but we’re finding that there are other motivators that are greater. The need to contribute to a better world, for example. That is something that we stand for. That’s important to people, just like a sense of inclusivity, small egos, being able to work together easily. People sometimes ask about pension plans during job interviews, but not very often. Compared to other retail companies, we have a relatively young population. For them, retirement is very far away.”
Not much interest
Shipper FlixBus doesn’t advertise with a pension plan either, although it does offer one. “We have a fairly young team and we notice they don’t really care about that,” Jesper Vis, managing director at Benelux says. “On the contrary, many young employees hate the pension contributions. They’d rather have that money in their account now.” Potential new employees rarely ask about it in job interviews, Vis says. “People that apply for jobs here often assume the pension plan is fine. It is kind of taken for granted.”
Not a priority, but they do want information
Bol.com offers two pension plans (the required “basic pension plan” with the industry-wide pension Retail fund and a top-up scheme for employees with higher wages), but also does not mention this in job ads. “Of course, there is limited space in our job ads,” spokesperson Tamara Vlootman declares. “This is usually not the first thing people look at in a new job, so it’s not at the top. But there is certainly information about it, and we take our duty of care about this very seriously.” More information about the pension plans is available on the website, and before they commence employment, candidates get the entire employment terms and conditions on paper, including an explanation of the pension plans offered.
Flexibility is important
Employment market expert Fedde Monsma is seeing that particularly in the hospitality and retail industry – sectors with a lot of young employees – pension is hardly ever mentioned in job ads. And if it is mentioned it is very briefly. “It might say something like “affiliated with pension fund X” or “Plan Y”, but not what that means. I don’t know if that is a recent development. Pensions have always been kind of misunderstood in job ads. Even though it is a significant employment condition, which you pay a lot for. If you work full-time in paid employment, you’re working an average of one day a week for your pension. Along with your employer, you are investing about 20 percent of your gross wages; that’s a lot of money.”
Monsma thinks the current generation doesn’t value pension as much as previous generations. “Money is still the primary employment condition, but you’re seeing that people in their twenties and thirties find other things just as important, such as being able to be flexible with their time. That is a big shift.”
Pension is not automatic
In 2018, the Central Bureau of Statistics was commissioned by the Ministry of Social Affairs and Job Opportunities to calculate how many employees in paid employment are not accruing any pension. That turned out to be 13 percent, which amounts to 856,000 people. These are primarily young people. Half of the employees with no pension is under 35 years of age, Minister Koolmees wrote to the House of Representatives at the time. In 98 percent of cases, this concerns small companies with less than 10 employees.
Employers have no pension obligation, unless this is made mandatory by the pension fund in the sector. The majority of the population comes under such a requirement and therefore has no choice regarding their pension. They automatically accrue their pension and so, in the eyes of employees, it has become something automatic, argues Monsma. Even though a pension plan is not at all automatic.
Individual responsibility too
Monsma believes that the fact that at least 1 of 8 employees is not accruing a pension is a worrisome development, but working people also have a responsibility in this: “You have to take a good look at your employment package when you work somewhere. Not only for now, but also for the future. It seems strange to me that people do a lot of research before they buy a fridge, a house or a car – is it efficient enough, big enough, how much does it cost? - but when it comes to work, they scan the employment terms and conditions and all they see is the number next to the gross wages and they sign on the dotted line. As an employee, you need to know what the consequences are of not having a pension plan. People who don’t have anything set up and think they can get some kind of pension later, will only have themselves to blame when they end up getting just the Old Age Pension, which is very minimal.”
Curious what young people think about pension? Read the interviews with Annelies, Job, Agnes and Dionne.