Just in time, Clary te Velde (60) discovered that she was in danger of losing an extra amount of pension, the so-called pension compensation. Earlier this year she quit her job as a healthcare manager because her partner, five years older, retired. “It’s nice to choose freedom together. I now have more time for hobbies, such as cycling with my cycling club, walking and going to the movies.” Te Velde officially left employment as of mid-November, but thanks to remaining days off, she was able to quit in May.
A family member advised Te Velde to continue paying pension contributions voluntarily for the last month and a half of this year. Her pension fund (Pensioenfonds Zorg en Welzijn, PFZW) will be transferred to the new pension system and at that time – like other pension funds – provides extra pension to a large group of participants. But this only applies to active participants, i.e. people who are still working on December 31 or who voluntarily pay pension contributions. In order not to miss out on this extra pension contribution, Te Velde now pays approximately 1,500 euros in premiums per month. This includes the part that the employer normally pays. She is willing to do it, because it will provide her with an extra income of approximately 130 euros (gross) per month from her retirement date.
People in their forties and fifties: be careful
People in their forties and fifties who belong to a pension fund need to be even more careful, as in most cases they will receive higher compensation amounts. That’s how it is. The new pension system changes the rules for pension accrual, and these will take effect as soon as the pension fund switches. The majority of the funds will do this on January 1, 2026 or 2027. In the current system, young and old participants build up the same number of pension rights for the same premium, meaning an equally high income for later. While the younger participant’s contribution may yield returns for a much longer period, they would actually have to build up more pension for the same euro premium. If you stay with the same pension fund for your entire working life, as was previously customary, this will be made up for when you are older. Because during that period you pay too little for what you get in return. But if you leave earlier, for example because you are starting your own business, you will not get value for your money. This will change with the new system: from now on you will build up more pension with the same euro when you are young.
People in their forties and fifties paid too much in their younger years and will no longer benefit from the new rules when they are older
The point is that the group of people in their forties and fifties in particular falls through the cracks: they paid too much in their younger years and will no longer benefit from the new rules when they are older. The pension funds compensate this, usually on the date they switch. Injured participants will then receive an amount paid into their pension pot in one go. The amount may vary per fund, depending on the buffers and the agreements made between employers and trade unions. But according to Ger Jaarsma, chairman of the umbrella organization De Pensioenfederatie, these differences are not very large. “The more negative you are as a participant in the calculations, the more you get. You can really assume that you will be well compensated.”
Anyone who would suffer without compensation will receive an extra amount. This applies to participants from about 35 years of age, with the peak around 52 years of age, according to FNV pension director Roelf van der Ploeg. He negotiated from the employee side with the largest pension fund in the Netherlands, ABP. This will make the switch on January 1, 2027 and will compensate hundreds of thousands of participants. The group that receives the most can count on approximately 40 percent of the salary in the year preceding the switch, minus the AOW offset (that is the part of your salary on which you do not accrue a pension premium). As an example, Van der Ploeg mentions a 50-year-old with an annual income of 58,000 euros. The pension basis is 40,000 euros and the one-off compensation of 40 percent amounts to 16,000 euros. This will yield at least 800 euros in additional pension annually, and that is without returns.
If you decide to work fewer hours in the year before the switch, the pension compensation will be calculated on a lower amount and you will therefore receive less
Serious money
In any case, it is serious money that you can miss out on in a number of situations. For example, if you decide to work fewer hours in the year before the switch, the pension compensation will be calculated on a lower amount and you will therefore receive less. The same applies to a sabbatical or unpaid parental leave. You can calculate the exact difference online at most pension funds. If it works, it is better to wait until the new year – if possible.
In other cases you may miss out on full compensation. For example, if you take early retirement in the previous year or if you end up at another pension fund due to a career change. You may also be eligible for compensation there, but you have to time it right. Suppose you work in education and you switch to a job in healthcare on January 1, 2026 (or later that year). The healthcare sector pension fund PFZW has already switched to the new system and will not pay you pension compensation, since you were not a participant on December 31, 2025. And you will not receive anything from your old ABP pension fund, because it will only be transferred on January 1, 2027. If you start your own pension fund before the transition date and no longer pay premiums, you will not receive that extra pension contribution anyway.
‘Best-yielding investment ever’
It is therefore smart to time a career move in such a way that you are not left out when switching to another pension fund. If you start your own business or retire early, it is an idea to voluntarily remain affiliated with the pension fund for a while. This will increase your monthly costs considerably, but according to FNV director Van der Ploeg, it is worth it. “This will probably be the best-returning investment you have ever made. Moreover, the amount you pay in premium is not too bad because you can claim it as a deduction on your tax return.”
If you start your own business or retire early, it is an idea to voluntarily remain affiliated with the pension fund for a while
If you have already taken the step, you can have such a ‘voluntary continuation’ take effect retroactively with most pension funds. There is a term attached to this, varying from two to nine months after you have stopped. In any case, you have to take the initiative yourself, early retiree Clary te Velde noticed. When she indicated to her employer at the beginning of this year that she wanted to stop working early, she heard nothing about the option to continue paying the pension premium and thus qualify for pension compensation. This information was only available on the pension fund’s website after the summer.
There has been some criticism about the provision of information by the pension funds. Including supervisor AFM (Financial Markets Authority) emphasizes the importance of clear communication. “You have to provide participants with proper information,” says professor of financial markets Bas Werker of Tilburg University. “They need to know where they stand, especially if they make choices that affect the amount of their pension.” He believes that not only pension funds sometimes fall short on this point, he believes that employees should also show more interest. “It seems that about three-quarters do not open the emails from the pension fund.”
It seems that about three-quarters do not open the emails from the pension fund
There is little that can be done about the fact that the amount of compensation differs per pension fund. Werker: “The law states that the transition to the new system must be balanced for all participants. But the funds are very different, the amount of their assets varies. That is why no quantitative requirements have been set for pension compensation.”
By the way, you can also receive double the compensation if you plan your career change very smartly. For example, if you switch from healthcare to education early next year: the compensation from the PFZW pension fund has already been received, while you will receive another compensation from the ABP at the beginning of 2027.
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