Imagine one income suddenly disappears
How does this affect your pension?
In this article we explain what to look out for if one of you lose your job. Besides the loss of income now, it also affects your pension accrual.
If one income is lost due to the coronavirus crisis or other circumstances, the pension accrual of that income stops. This means a lower pension in the long term.
Alternatives Of course there are options to accrue a pension yourself, for example through an annuity or bank savings. Another option is for the person who does accrue pension to accrue additional pension through the voluntary Extra or Net Pension Scheme. But if you already have less income, the question is whether you can afford it.
Suppose this doesn't work... If you don’t manage to compensate that part of your pension accrual in another way, you will receive less pension when you retire. If you don’t accrue pension for a few months or a year, you may be able to take this in your stride. But the longer this goes on, the greater your pension shortfall will be. This is especially true if the lost income related to a full-time job or the highest salary between you.
What can you do? Read these tips.
Take a look at your pension situation You can consult your pension situation on Mijnpensioenoverzicht.nl. Both of you can log in to this website and receive a complete pension statement, including any pension accrued elsewhere and your state pension. Assess whether the accrued pension matches the standard of living you envisage when you retire. Consider what fixed costs you expect to have then and whether you have enough money left over for all your other expenses. Monitor your pension situation that way every year.
If your anticipated pension is inadequate, here are some things you can do:
- Look at the options for taking a step back financially, for example at Nibud.
- Supplement your pension in due course.
- Make sure your home is largely mortgage free when you retire.
Note: partner’s pension will also be much lower Pension does not only provide income when you stop working (retirement pension), it’s also a benefit for your partner if you die (partner’s pension). If you no longer accrue pension because you’ve lost your income, a different rule applies to the partner’s pension. As a result, your partner’s pension is considerably lower. Partner’s pension is then not based on the final retirement pension, but on the pension accrued up to that point. That can be a substantial difference. Also include this in the calculations of your financial picture. Suppose one of you dies, will the income suffice for the surviving partner? You could consider an insurance solution for this purpose.
Note: not married or in a registered partnership? Make sure that your partner is registered with TNO Pension Fund. This is important because your partner will then receive partner’s pension if you die. If your partner is not registered with us, your accrued partner’s pension will lapse. Also check how this is arranged in your partner’s pension scheme, so you know where you might need to arrange something extra.
Can you lose your accrued pension?
In principle, you don't ‘lose’ your accrued pension if you’re unemployed. Only the accrual of your pension stops from that moment. Look at how much pension has been accrued, because the Small Pension Value Transfer Act (Wet Waardeoverdracht kleine pensioenen) has been in force since 2019. If your accrued pension is less than €2.00, it will lapse. For an amount between €2.00 and €497.27 (2020), our pension administrator AZL will ensure that pension is transferred to your new pension administrator as soon as you are employed again. From €497.27 (2020), you can choose whether you want to transfer the pension to your new pension administrator. This is referred to as value transfer. You can read more about this on our website.