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Platforms compared
0+
Countries covered
0
Categories
Daily
Data updates
~18-25%
Total contribution rate
€1.5T+
NL pension fund assets
67
AOW retirement age
~€1,400/mo
AOW single (2025)
What are employer pension schemes?
An employer pension (also called an occupational pension or second-pillar pension) is a retirement savings arrangement provided through your workplace. In many European countries, employer pensions form the backbone of retirement income alongside the state pension.
There are two fundamental pension models:
Defined benefit (DB) pensions promise a specific retirement income based on your salary and years of service (for example, 1.875% of your average salary per year of service). The employer and pension fund bear the investment risk. If you work for 40 years, you might receive 75% of your average salary as pension. DB pensions are becoming rare in the private sector but remain common in public sector employment.
Defined contribution (DC) pensions involve fixed contributions (from you and/or your employer) that are invested in a personal pension pot. Your retirement income depends on how much was contributed and how well the investments performed. The investment risk sits with you, the employee. DC pensions are becoming the standard across Europe as employers move away from the cost uncertainty of DB promises.
Contributions are typically shared between employer and employee. In the Netherlands, the combined contribution is approximately 18-25% of pensionable salary, with the employer paying the majority (roughly two-thirds). Contributions are tax-deductible, reducing your current income tax, and the pension pot grows tax-free. You pay income tax only when you receive pension payments in retirement.
The EU's IORP II Directive (Institutions for Occupational Retirement Provision) provides a framework for cross-border pension funds and sets minimum governance and information standards. However, pension systems remain primarily national, and transferring pension rights between EU countries remains complex and often impractical.
Frequently asked questions
Contributing up to the match is the minimum. Beyond that, compare the employer pension fees and fund options with what you could get in a personal pension or investment account. If the employer pension has high fees or limited fund choices, additional savings may be better placed in a low-cost personal pension or ETF account.
Your accrued Dutch employer pension stays in the scheme. You are entitled to the benefits at retirement age regardless of where you live. Transferring to a foreign pension is possible but complex and not always beneficial. Consult a pension advisor before making any transfer decisions.
Requirements vary by country. In the Netherlands, most employers must offer a pension through a sector fund or company scheme. In the UK, auto-enrolment is mandatory for eligible workers. Germany has a right-to-convert (Entgeltumwandlung) where employees can redirect salary into a pension. In Sweden, collective agreements make employer pensions near-universal. Check the rules for your specific country.
Employer contribution rates vary significantly. In the Netherlands, employers typically contribute 15% to 25% of pensionable salary. In the UK, the minimum employer contribution is 3% under auto-enrolment. In France, employer contributions range from 5% to 10%. German employers often match employee contributions up to 4% of salary. These contributions are a valuable part of your total compensation package.
In most EU countries, your accrued pension rights are preserved when you leave an employer. You may be able to transfer the pot to your new employer's scheme, leave it with the old provider, or in some cases consolidate it into a personal pension. The EU's Institutions for Occupational Retirement Provision (IORP II) directive sets minimum standards for protecting your rights when changing employers across borders.
In countries with mandatory participation (like the Netherlands), opting out is generally not possible. In the UK, you can opt out of auto-enrolment but lose your employer's contribution, making it a poor financial decision in most cases. Before opting out anywhere, consider that employer contributions are effectively free money added to your retirement savings.
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