Information sessions: Voluntary net pension plan 96k plus. Zaandam, October 21, 2015

Transcription

1 Information sessions: Voluntary net pension plan 96k plus Zaandam, October 21, 2015

2 Agenda 1. Welcome & Introduction (5 min) 2. Changes / principles Ahold plan (10 min) 3. Deep Dive - ABN AMRO Pensions (50 min) 4. Arrangements within Ahold (10 min) 5. Questions (20 min) 6. Wrap up (5 min) 2

3 1. Welcome & Introduction (Ahold & VAHP)

4 Introduction Legislative changes concerning Dutch pensions have led to Ahold, the COR (Central Works Council) and the VAHP (Association for Higher Ahold Personnel) working together to come up with a robust solution concerning: Pensions up to the salary cap Pensions above the salary cap Allowance External provider Thorough selection process 4

5 2. Changes / principles Ahold plan (Ahold Pension Fund)

6 Changes to the fiscal policy As of January 1, 2015, the gross pensionable salary is capped at (2015) on a full-time basis o Due to a higher percentage of accrual, the salary is capped at a lower amount than the legal limit of 100,000 Up to this limit: the contribution from gross salary and pension benefits will be taxed in due course 6

7 Pension accrual Pensionable salary 96,544 Accrual Starting date Retirement 7

8 Survivor s pension in the event of death prior to retirement date Pensionable salary Accrual Risk insurance Starting date Retirement 8

9 Survivor s pension in the event of death prior to retirement date Situation 2015 Only in 2015 (premium paid by Ahold) Pensionable salary Accrual Risk insurance Risk insurance Starting date Retirement 9

10 Net pension plan You can supplement your pension with a net pension plan Retirement pension Survivor s pension Pensionable salary Accrual Net pension plan Accrual Net pension plan Risk insurance Starting date Retirement Starting date Retirement 10

11 Gross allowance (net pensionable salary) Percentage of Age salary - 96, % % % % % % % % % Example Age: 46 Pensionable salary: 130,000 Part time % 100% Net pension base: (130,000 96,544) * 100% = 33,456 Allowance percentage = 20.1% Gross allowance net pension base: 20.1% * 33,456 = 6,725 gross a year or 517 gross per period 517 gross is approx. 517 * (1-52%) = 248 net 11

12 Retroactively effective until p In p , the gross allowance from p will be paid out to associates in a single payment When a full or partial pension accrual is chosen in the net pension plan, this allowance will also be fully or partially paid out Associate decision to be made between November 2 and November 13,

13 3. The plan in detail (ABN AMRO Pensions)

14 4. Arrangements within Ahold

15 Timeline and next steps 2015 October November December 2-11 Portal opens Selection Dec Payment in Portal Letter & brochure Information sessions Hotline & Onsite Helpdesk 15

16 Net pension plan choices Default Net pension plan choices 100% net pension plan savings + risk insurances. net pension plan savings + risk insurances Only risk insurances Opt out Choices: Savings amount (the p12 choice also applies to p1 through p11) Investment choices Opt-out 16

17 Summary pension schemes Salary up to 96,544 Ahold Pensioenfonds Mandatory Defined benefit Contribution is defined by Ahold, COR and pension fund Contribution from gross salary Allowance is taxed in due course Pension allowance is paid by Ahold Pensioenfonds Collective investments Board of Ahold Pensioenfonds determines asset mix Salary over 96,544 ABN AMRO Pensioenen Voluntary Defined contribution Choice in amount of contribution Contribution from net salary Allowance will not be taxed in due course Pension allowance is paid by an insurance company of choice Individual investments Lifecycle investing or choose from several investment funds 17

18 5. Questions

19 6. Wrap up atie/salaryexceeding96544/r/werknemer

20 Information Sessions: Net pension plan 96k+ plan Back Up Slides

21 What the legislator aims for. Current state: Gross premiums are paid into the pension fund and the pension funds invests these premiums Pension benefits are paid gross and are taxed Legislator receives taxes when the associate retires employer employee Gross premium Pension fund Tax payments Net benefit Accrual phase 65 Benefit/pensioners phase Future state: Premiums are taxed so the so the government receives the tax earlier Incumbents might decide to not save for retirement and spend part of the premium, increasing consumer demand, stimulates the economy. Legislator aims to advance tax payment and to stimulate net income expenditures employer Tax Net pension allowance employee Net premium Net premium Pension Savings Risk Insurance Net benefit Accrual phase Net income 67 Benefit/pensioners phase 21

22 New State - Overview Insurance premium (death & disability) Risk Insurance Pensionable salary exceeding Employer Tax Net pension allowance Employee Exempted from wealth tax in Box III Pension Savings Wealth tax in Box III At retirement age, the pension benefits are net (no tax at pay out) Net benefit Net allowance is paid to employee who can decide to invest in pension saving and/or risk insurance vehicle and/or use as net income Accrual phase Net income 67 Benefit/pensioners phase Risk Insurance (death & disability) Pensionable salary up to Employer Employee Gross premium Pension fund Tax payments Net pension 67 Accrual phase Benefit/pensioners phase 22

23 Q&A Q The allowances per age bracket are calculated to replicate the actuarial costs of the average wage pension benefit under the current plan rules (above 96k). Is this right? If so, is the design of the age dependent allowance table a one-time exercise or does Ahold have to re-calibrate the table periodically? A The (maximum) age-dependent table is prescribed by fiscal law. Ahold may consider recalibration if the fiscal law is changed. Q Could you please explain net scale, gross scale and gross including cost compensation? Does the table also include the risk component? A it is a net pension plan therefore, a net scale is prescribed by law. Ahold has used actuarial costs to determine the gross scale. Ahold will also compensate for risk insurance, adm costs and cost for waiver of premium. Q Is the table aligned with the guidance of the Dutch tax authorities17/12/2014 (to avoid Box 3 taxation)? A Yes it is Q What is the rationale behind Box 3 Wealth Tax exemption only applying in case of a voluntary participation? A This is prescribed by law Q How can we be sure that the arrangement will be cost neutral? A At this moment it is cost neutral. Costs will increase when the average age increases. Q same (or even higher) level of benefit: how can this be reasonably demonstrated? A there are "maatmanberekeningen" available Q To what population does the proposal apply: current employees as well as new joiners? A current and new (from outside Ahold and current employees whose salary increases above ) Q What are the criteria for the selection of the external provider of the new pension arrangement? A Administration and investment costs, good communication and execution, user friendly portal, medical acceptance 23