Many expats in the Netherlands have resided in other countries and will probably do so again in the near future. These expats might end up with many different kinds of pension claims in several countries. Of course, this is not very convenient.
In order to prevent these issues, expats can try to transfer all of their corporate pension claims to one final corporate pension claim. Is this as easy as it sounds? Well, such a transfer raises several issues:
In order to prevent all of these issues, it would be ideal for expats in the EU to have their own personal corporate pension plan, which would be valid in all EU countries.
This would prevent transfer issues and the expat would also be able to choose the kind of pension plan that best suits their wishes.
Due to several legal matters, it is not yet possible for an expat to have such an individual corporate pension plan in the EU. It is also highly unlikely that this will change in the near future.
In June 2017, the European Commission introduced “PEPP for Expats”. This newly to be created Pan European Pension Plan (PEPP) will be available to every EU citizen in order to build up sufficient retirement coverage with tax benefits.
The PEPP will be a voluntary scheme, offered by a broad range of financial companies across the EU. It should serve as a complement to public and occupational pension systems, alongside existing national private pension schemes.
This will result in the following summary regarding pension accumulation:
The positive aspects of the PEPP for Expats are as follows:
Many EU member states are looking into the future funding of state pensions. This may lead to a reduction in what is offered. With this in mind, it is almost a given that PEPP will be useful.
We should be critical of the following aspects of the PEPP for Expats:
Besides the EU Commission, there is substantial support for the PEPP from the European Parliament and from the European Insurance and Occupational Pensions Authority (EIOPA). EIOPA is the European supervisor on insurance and pensions and has an important role and excellent reputation. It also has a very positive attitude towards the PEPP.
We will follow the process of how the EU tries to create the PEPP as a viable alternative for corporate and state pensions in a positive, yet critical manner. We expect that the deciding factors for the creation and success of the PEPP will come down to the following:
In the Netherlands, the tax benefits for corporate pensions are more substantial than the tax benefits for the private annuities of Pillar 3.
The Expat Pension Holland approach is to translate complex situations into clearly communicated advice. The choice between a standard or tailor-made expat pension claim is very important and by its nature, rather complex.