A] Why?
Expats often do not have an active Occupational Pension Plan or do not yet use all the pension related tax benefits.
For them it can be very interesting to get a Dutch Private Pension Plan.
Especially as State Pension Claims can be expected to decrease in real value in the future.
B] Dutch Private Pension Plan Also For Americans
Due to the far reaching US Fatca legislation, most investment institutions in The Netherlands do not accept US persons as client as it would create too much compliance issues. Which makes it impossible for US persons to escape the low interest rate and invest in a normal manner in The Netherlands.
But a Dutch Private Pension Plan with the wide range of investment options is still possible for them. The longer your investment horizon until retirement age, the more interesting such an investment will be due to the substantial effect of compounded return on investment. Plus of course the substantial tax benefits...
C] Tax Benefits
Each Dutch tax resident is entitled to annually invest maximum € 15.317,- in a Dutch Private Pension Plan which premium is income tax deductible. (This is called 'Jaarruimte'.)
The exact annual personal amount is related to the amount of gross wages in the previous year and if there was already an Occupational Pension Claim.
To the extent that these benefits have not been completely used during the last 7 years, an extra annual tax deductible premium of maximum € 8.065,- can be deposited into the plan. (This is called 'Reserveringsruimte'.)
Besides the mentioned Dutch income tax deduction benefit, another tax benefit is that the capital within a Dutch Private Pension Plan is exempted from Dutch box 3 wealth taxation.
Finally it is relevant that as of July 2023 the 'Jaarruimte' is expected to be maximum € 33.746,- and the 'Reserveringsruimte' maximum € 38.000,- and the latter going back for 10 years. As soon as the related law is effective, we will include this on our site.
D] Total Premium Flexibility
The essence of the plan is to use the full tax benefits. Which amount can differ each year. Therefore it is advisable to get the plan which requires only only premium deposit at the start and has the flexibility for you to each year in the future decide if you would like to make another deposit without being obligated to do so.
E] Investments
The investments are the engine of the plan. Therefore it is relevant that the chosen investment funds are excellent, according to your Personal Risk Profile and checked every few years. The Personal Risk Profile we carefully establish using our own 5 page form.
The plans we offer are well known to us and have excellent investment funds at low costs.
F) Tax & Additional Investments
If you might prefer to invest more capital into the plan than the annual maximum tax deductible amount, that is also no problem.
At retirement age you then request from the tax authority a declaration in which they confirm that the amount of capital related to these premiums is not taxed during the pay-out. Which is called the Balance Method.
G] Next of Kin Coverage
In case you might pass away before retirement age, your next of kin will be the beneficiary of the existing pension capital.
H] Costs
Due to the fierce competition between pension providers, the costs of Dutch Private Pension Plans are very low. As they should be as they are i.e. a tax facilitated investment account.
I] Shop At Retirement Age
At retirement age you have the right to contact a number of insurance companies and request their quotes in order to select the best and highest pay-out offer.
Always use this option as the differences can be substantial!
J] Pay-Out
The total of deposited premiums plus the total return on investment will be used to provide a pay-out as of retirement age during at least 5 years.
Lump Sums or Flexi Draw Down are not possible.
K] International Aspects
Wherever you live, it is no problem to get the pay-out from The Netherlands as of retirement age.
If you live in another country, that country will probably tax your global income. Then you request a Dutch tax exemption in order to prevent double taxation.
L] Portal
Each Dutch Private Pension Plan provides a fine portal so you have 24/7 insight into all parameters and investment funds.
M] Fixed Fee & Services
We will gladly assist you in getting the best Dutch Private Pension Plan for a one time fixed fee of € 645,- and no VAT.
This includes the following services:
- Carefully establishing your Personal Risk Profile;
- Selection and comparison of quotes;
- Making all the required tax calculations for maximum tax benefits;
- Providing a quality English Pension Memorandum of 6 pages which will include all facts, your wishes, all options and our recommendations;
- Complete implementation;
- Aftercare is included and gladly offered.
N] Independent Company
We highly value that our company is totally independent and has no ties with any financial institution.
According to Dutch law we only receive fees from clients and not from any financial institution.