For many foreigners at TU Delft, the Dutch pension system isn’t very transparent or beneficial.In Holland, all civil servants belong to the private ABP (civil service) pension fund, and each month employers and employees pay significant sums of money into this fund.
When retirement age is reached, and a person has participated in the fund for 40 years, he or she will receive 70 percent of their last salary for life, an amount of money that is the sum total of the public Dutch state pension fund contribution and of the private ABP pension fund. If you’ve worked less than 40 years, the private pension contribution is less.
In Holland, it’s easy to switch jobs (and pension funds) without splitting up your pension into small parts. But problems start when you leave Holland, after having already built up some pension funds. ”Most foreigners at TU Delft have built up only a part of their pension reserves. After leaving Holland, they must wait until they’re 65 to get at the money they’ve saved with the ABP,” says Jaap Willems, head of the TU’s Salary Administration & Information department. ”Most people don’t feel comfortable with the idea of having a very fragmented pension provision, with some pension savings in Holland and others elsewhere. Besides, people feel insecure about receiving the actual payment in perhaps thirty years time.”
Move
During a presentation last week by the ABP pension fund for foreign TU employees, many PhD students asked if they could get at their pension savings when they’ve finished their jobs in Holland and then invest it themselves elsewhere. According to Willems, this isn’t easy to do: ”There’s a fiscal problem and a pension fund problem. The money employers and employees pay to pension funds is tax-free. Once the fund releases these savings, one must pay tax, and that could be very costly.”
Willems adds that the pension fund only has agreements with a limited number of other (similar) pension funds for mutually accepting international transfers of pension savings. Most pension funds in different countries cannot work together, because they function according to different pension systems.
Back home or in a third country, foreign employees who leave the TU must start again. ”Academic populations are not stable anymore,” says Willems. ”Pension funds don’t
take into account that people move between countries. But they should, and adapt themselves to that new reality.”
Willems wants the Dutch ABP fund to work together with other pension funds abroad. In that way, he says, fragmentation of pension provisions can be avoided: ”In the European Union (EU), people are busy arranging to make it possible to switch between country’s without losing the pension claim. But this won’t help many TU foreigners, because most of our foreign employees come fromnon-EU countries.”
Willems argues that if pension funds can’t find a solution to this problem, then TU Delft should find its own solution for this special category of people.
For many foreigners at TU Delft, the Dutch pension system isn’t very transparent or beneficial.
In Holland, all civil servants belong to the private ABP (civil service) pension fund, and each month employers and employees pay significant sums of money into this fund. When retirement age is reached, and a person has participated in the fund for 40 years, he or she will receive 70 percent of their last salary for life, an amount of money that is the sum total of the public Dutch state pension fund contribution and of the private ABP pension fund. If you’ve worked less than 40 years, the private pension contribution is less.
In Holland, it’s easy to switch jobs (and pension funds) without splitting up your pension into small parts. But problems start when you leave Holland, after having already built up some pension funds. ”Most foreigners at TU Delft have built up only a part of their pension reserves. After leaving Holland, they must wait until they’re 65 to get at the money they’ve saved with the ABP,” says Jaap Willems, head of the TU’s Salary Administration & Information department. ”Most people don’t feel comfortable with the idea of having a very fragmented pension provision, with some pension savings in Holland and others elsewhere. Besides, people feel insecure about receiving the actual payment in perhaps thirty years time.”
Move
During a presentation last week by the ABP pension fund for foreign TU employees, many PhD students asked if they could get at their pension savings when they’ve finished their jobs in Holland and then invest it themselves elsewhere. According to Willems, this isn’t easy to do: ”There’s a fiscal problem and a pension fund problem. The money employers and employees pay to pension funds is tax-free. Once the fund releases these savings, one must pay tax, and that could be very costly.”
Willems adds that the pension fund only has agreements with a limited number of other (similar) pension funds for mutually accepting international transfers of pension savings. Most pension funds in different countries cannot work together, because they function according to different pension systems.
Back home or in a third country, foreign employees who leave the TU must start again. ”Academic populations are not stable anymore,” says Willems. ”Pension funds don’t
take into account that people move between countries. But they should, and adapt themselves to that new reality.”
Willems wants the Dutch ABP fund to work together with other pension funds abroad. In that way, he says, fragmentation of pension provisions can be avoided: ”In the European Union (EU), people are busy arranging to make it possible to switch between country’s without losing the pension claim. But this won’t help many TU foreigners, because most of our foreign employees come fromnon-EU countries.”
Willems argues that if pension funds can’t find a solution to this problem, then TU Delft should find its own solution for this special category of people.
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