Temporary amendment of the Early Retirement Scheme

Many employers want to offer an early pension scheme to employees who have almost reached the statutory retirement age. From 1 January 2021, you can do so, subject to certain conditions, without being subject to an early retirement scheme penalty. To this end, temporary rules have been included in the Lump-Sum Payment, Early Retirement and Leave Savings Scheme Act (Wet bedrag ineens, RVU en verlofsparen). We explain this part of the law below. Would you like to know more about ‘lump-sum payment’? Click here.


Early retirement scheme conditions

The Early Retirement Scheme (RVU) is a temporary scheme. In order for you to make use of this, the early pension scheme that you offer must meet a number of conditions:

  • The scheme may take effect no more than three years before the statutory retirement date.
  • The total amount may be granted either as a lump sum or in instalments.
  • The scheme has been in force with effect from 1 January 2021.
  • The deadline for agreement between employers and employees for an employee to take early retirement is 31 December 2025. In other words, the final payment will be made in December 2028 at the latest.
  • The amount of the payment is independent of the original income, employment history and/or full-time or part-time employment, and will not exceed EUR 1,847 gross per month (amount of 2021). Over 36 months: €66,492
  • The scheme is accessible to everyone.

In addition, the payment is not regarded as an early retirement scheme if the amount corresponds with the net statutory old-age pension for single persons. The threshold exemption consequently amounts to €22,164 (2021) (per month: €1,847) per employee per annum. The maximum gross payment is not equal to the net statutory old-age pension for a single person. The gross amount is set in such a way that this net amount corresponds to the net statutory old-age pension for a single person (everything calculated on standard principles).


Early retirement and unemployment benefit

Right to unemployment benefit

In a letter to Minister Koolmees (Ministry of Social Affairs and Employment) on 27 May 2020, the UWV benefits agency confirmed that those who make use of this temporary early retirement scheme are also eligible for unemployment benefit.

The normal procedure and the normal conditions apply to these persons. This means that your employee must continue to be available for the employment market (including obligation to seek work) on the instruction of the UWV. In addition, your employee is required to report holidays and have these approved by the UWV. This will also be checked. There is no longer a requirement to apply for jobs in the year immediately preceding the date on which the statutory old-age pension commences.

Amount of unemployment benefit

The early retirement benefit will be deducted in its entirety from the unemployment benefit. For the first two months, unemployment benefit is 75% of the last earned salary and subsequently 70%. This percentage includes the periodic payment from you as an employer.

It is possible that your employee already receives old-age pension prior to the statutory retirement date, for example from an earlier scheme with a retirement age of 65. This pension amount will also be deducted from unemployment benefit if and insofar as this pension originates from the same employment from which the entitlement to unemployment benefit arises. If the pension originated from a previous employment relationship, it is not deducted from the unemployment benefit.

Pension accrual stops upon termination of employment

If your employee makes use of an early pension scheme, they must bear in mind that the pension accrual stops as soon as they terminate their employment. The amount of old-age pension that is expected if the employee reaches 68 is consequently lower. It is important that both you and your employer are aware of this in order to avoid unpleasant surprises.