The Dutch government has decided to once more postpone the introduction of a lump sum payment of up to 10% of pension pots upon retirement. Pensions minister Carola Schouten wants to allow parliament more time to evaluate a revised lump sum proposal.
It’s the third time the introduction of the lump sum in the Netherlands, which was first proposed in 2020, is being postponed.
After the law has passed the Senate in 2021, then-minister Wouter Koolmees delayed the introduction of said option from 2022 to 2023 after parliament had complained pensioners would receive different tax treatment depending on the date they retire.
Under the Dutch tax system, the effective income tax rate in the year people retire rises the later one reaches pensionable age. As a consequence, the effective income tax rate of someone retiring in December can be up to 20% higher than the tax rate of someone of similar income retiring in January.
Last summer, the new pensions minister Schouten delayed the introduction by another six months to 1 July 2023. But parliament and pension funds need yet more time to discuss the proposed revisions to the law and to inform their members, Schouten said in a letter to parliament.
According to Schouten, it’s feasible for the law to come into force on 1 January 2024. The Dutch pension federation, however, said on its website that pension funds will need six to nine months to inform their members after the finalisation of the amended law.
“Depending on the speed of the proceedings in parliament, it will have to become clear whether 1 January 2024 is a feasible date,” it said.
For the original article, go to Pensioen Pro
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