A settlement agreement (VSO) is not only about the end of your employment, but can also affect your pension accrual. Many employees do not consider this, but this very topic can have a major financial impact in the long term.

In this article, we explain what happens to your pension under a VSO, what agreements you can make, and what to watch out for before you sign.

What happens to your pension under a VSO?

When your employment ends via a VSO, in principle your pension accrual with the employer also stops. This means:

• No further contributions by the employer and the employee.

• Your accrued pension remains, but no longer grows.

• Any supplementary pension arrangements may end.

Important considerations

1. Stopping pension accrual

After termination you no longer pay contributions yourself, unless you start working elsewhere with a pension plan.

2. Partner’s and survivors’ pension

Some schemes include a survivors’ pension that lapses as soon as you leave employment. This can be a significant risk.

3. Voluntary continuation

Many pension funds offer the option to have your pension accrual continued voluntarily at your own expense. This can be useful, but is often costly.

4. Avoiding a pension gap

If you are dismissed shortly before your retirement age, this can create a substantial pension gap. Negotiating compensation is then especially important.

Real-life examples

• Example 1: A 61-year-old employee received a VSO without any arrangements regarding pension. Due to the loss of 4 years of pension accrual, he missed out on thousands of euros.

• Example 2: Through negotiations, an employee received, in addition to the transition payment, an extra contribution from the employer for his pension accrual.

• Example 3: An employee with a survivor’s pension had it voluntarily continued after termination to protect his family.

Negotiation options

1. Extra severance payment as compensation for lost pension.

2. Contribution to pension premium for voluntary continuation.

3. Continuation of insurance for survivor’s pension.

Checklist: pension in the VSO

• 📄 Check what your pension scheme states at the end of employment.

• 💶 Calculate the pension gap that arises due to early termination.

• 📝 Negotiate compensation in the VSO.

• 🔒 Pay attention to partner and survivors’ pension.

• ⚖️ Have your VSO checked by an employment lawyer.

Common mistakes

• Not thinking about your pension at all upon termination.

• Thinking that pension accrual continues automatically.

• Not asking for compensation for missed years.

• Overlooking the survivors’ pension.

Frequently asked questions (FAQ)

1. Does my pension stop automatically upon termination via a VSO?
Yes, unless you continue it voluntarily or find a new job with a pension plan.

2. Can I get compensation for missed pension?
Yes, this is negotiable in the VSO.

3. What happens to my accrued pension?
It remains safely with your pension fund.

4. What about survivor’s pension?
This can lapse, unless you continue it voluntarily.

5. Can a lawyer help with this?
Yes, a lawyer can calculate what you lose out on and negotiate compensation.

Why Arslan Advocaten?

• Specialized in employment law and termination arrangements

• Carefully calculate the financial impact on your pension

• Negotiate for additional compensation or premium contribution

• Assist with agreements on survivor’s pension

Conclusion

A settlement agreement can have major consequences for your pension. Do not leave this topic undiscussed, especially if you are older or have supplementary pension arrangements. With the right agreements, you can prevent a large pension gap.