The clock is ticking: Is your Works Council ready for the new pension law?

If your organisation does not fall under a collective labour agreement (CAO) or an industry-wide pension fund, then management and the Works Council are jointly responsible for the new pension scheme and therefore also for the transition. That requires direction, expertise and timely action.

Below is a practical step-by-step plan for works councils with a pension scheme through a PPI or an insurer:

1. Put pensions at the top of the agenda

Put pensions structurally on the consultation agenda with management.
Ensure that missing knowledge is supplemented through training or external experts.

2. Map out the current schemes

Ask management or HR for:

• the current pension agreements and implementation agreements;
  arrangements regarding survivors’ pensions and disability;
• insight into the interests of different employee groups (young/old).

3. Important! Make choices for the new scheme

Think together about:

• a solidarity-based or flexible defined contribution scheme?
• the level of the flat-rate contribution (max. 30–33% of the pension base);
• distribution of contributions between employer and employee;
• survivors’ pension: yes or no?
• ANW gap insurance: include it or not?
• pension accrual in case of disability: continue premium-free?
• compensation: is it balanced?
• grandfathering (two schemes alongside each other) or not?

4. Review the transition plan

The transition plan contains all choices, calculations and substantiations. It forms the basis for the request for consent. Important:

• The Works Council does not give consent to the transition plan itself (but to the pension scheme), yet it must assess it.
• The financing plan (for compensation) is part of it.
• Final submission date to insurer/PPI: as a guideline 1 October 2026. Preferably earlier.

5. Use your right of consent

The Works Council has a right of consent with regard to:

• the pension agreement itself;
• parts of the implementation agreement that directly relate to it.

6. Work on good communication

• Develop a communication plan together with management.
• Inform in a timely and clear manner about consequences and choices.
• Take into account the consent of individual employees (unless a unilateral amendment is possible).
• Remain involved in evaluation and adjustment.

The pension transition is complex. So start as soon as possible. Do not wait until it is too late: insurers and pension advisers expect peak demand towards 2027 and will probably not be able to help everyone in time. Those who only start then run the risk of ending up with a fiscally non-compliant scheme, with the consequence that accrued pension is taxed as wages.

That is something you want to avoid. So: start on time!

Want to know more about these steps? Check out our other pension blogs.

Has the consultation stalled, or is the Works Council unable to reach a decision? Feel free to get in touch. We are happy to help you further!

Jan-Pieter Vos ,Lawyer Employment Law & Works Council Participation, and Barbara van Dam, Legal Assistant Employment Law & Works Council Participation.

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