Opposition to mandatory pension affiliation

Prevent claims from a compulsory industry pension fund

Every year thousands of companies receive mailings from one or more compulsory industry pension funds requesting them to pay pension premiums for its employees to such a pension fund. Many companies end up in legal proceedings. They are often suddenly contacted by a compulsory industry pension fund to pay pension contributions to that fund. This often involves tens of thousands of euros, even though the business owner has often already arranged pension provision properly for employees through a pension insurer. In that case, the business owner risks having to pay twice for pension provision, with all the consequences that may have for the business.

Can a pension fund simply claim pension contributions?

In the Netherlands, almost all sectors have collective labour agreements and industry pension funds. Employers’ and employees’ organisations, including trade unions, determine for each sector which type of business, with certain sector-specific activities, falls under a particular industry pension fund. This is set out in the so-called scope provision of each compulsory industry pension fund. However, these scope provisions are often not clearly defined, or they overlap with another industry pension fund. Or there is no main activity criterion, meaning that a business owner may still fall under the pension fund for all employees, incorrectly, and have to pay contributions. As a result, a business owner may even be approached by two industry pension funds with a request, or even a demand, to pay pension contributions for all employees.

This so-called compulsory affiliation decision of the Minister of Social Affairs and Employment, which determines which businesses or activities fall within a particular industry pension fund, has the force of law. That is the basis on which an industry pension fund can suddenly request information from a business owner about business activities and employees, and send contribution invoices.

Opposition to compulsory affiliation with an industry pension fund

The business owner can object to this. As mentioned, many business owners already have their own pension arrangement, and because of the unclear scope provision it was often not clear that a compulsory industry pension fund could apply. It may also be that the business’s own pension arrangement is better for employees than that of the industry pension fund. A business owner may also argue that, due to the number of employees, turnover or type of activities, the business does not fall within the activities described by the pension fund at all.

Warning signs on receipt of a letter from a compulsory pension fund

As soon as a business owner receives a letter from a compulsory industry pension fund requesting information, alarm bells should start ringing. From that moment on, it is important what information the business owner provides to the fund and how communication with the pension fund is handled. This is especially important if a business owner receives letters requesting, or demanding, pension contributions to be paid to a pension fund, often with years of retroactive effect. In that case, it is wise to seek advice. Under the law, a pension fund may even collect the pension contributions from the business owner by means of a so-called enforcement order. Legal proceedings can be initiated immediately before the sub-district court in response.

Ultimately, the business owner wants to prevent the company from getting into serious financial difficulties because it has to pay sudden and retrospective, double pension contributions to a compulsory pension fund. GMW lawyers can advise you and help you with communication and, if necessary, discussions with the industry pension fund, as well as conduct the proceedings.

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