BeFrank calls for radical pension reform

12 April 2016


A personal pension account for everyone in the Netherlands, one that people can manage themselves – that’s the plea of the online pension provider BeFrank.

Such a pension account would give Dutch citizens control over their future retirement income. BeFrank believes that this is sorely needed. The pension provider’s own research has shown that pension awareness in the Netherlands is very low. As many as 80 percent of those surveyed were barely or not at all concerned with saving for their retirement. A quarter stated that they would only start doing so halfway through their careers. A third were putting it off until a new job appeared on the horizon.

One million self-employed persons
‘Our current pensions system is not well adapted to the rapid changes we are seeing in the labour market,’ says Folkert Pama, director of BeFrank. ‘People change jobs much more frequently than, say, thirty years ago. With a variety of employers, many Dutch people have very little understanding of the level of accrued pension.’ There has also been an unstoppable growth in the number of self-employed persons. There are now almost one million, of whom more than half are not accruing any pension according to earlier research by the ING Economics Department. This creates enormous challenges for the Dutch pensions system. Without changes, it threatens to eventually become unaffordable.

Bank account for your pension
BeFrank’s advocates to give everyone his or her own pension account. ‘One to which employers, clients and you yourself can contribute up to a maximum amount allowed for tax purposes. You can manage this account yourself or entrust it to a pension provider,’ says Pama. ‘Up to your retirement, the money can yield a profit. Thereafter it is up to the account holder to determine how he or she will use the money accrued.’ There are various countries that already have a similar system. For example, people in Chile can choose between six different pension providers.

Raising awareness about pensions
Self-managing your pension also leads to greater awareness of this important financial product. And that’s something the Dutch people want. Research by BeFrank has shown that more than 40 percent of people would like to maintain control of their pension themselves. This is also emphasised by Hans van Meerten, Affiliate Professor of International Pension Law at the University of Utrecht. ‘An individual account that you can manage yourself is in line with what people want. This will probably renew the trust that people have lost in pension funds. A personal account is also much more easily “transferable” within and outside the Netherlands than is currently the case. And not unimportantly, the government and the social partners cannot affect your pension by engaging in all sorts of arcane practices.’

Pensions will become transparent
BeFrank believes not just that pension awareness in the Netherlands will be greatly boosted by this change, but also that it will lead to a much more transparent pensions system. ‘Everyone will know immediately where he or she stands when it comes to pensions,’ says Pama. ‘The days of having numerous pension schemes will finally be over. Just as you pass on your bank details for your salary, you will pass on your pension account details when you change job. This fits much better with the way we live now.’

Advantages of this system at a glance
1. People will gain control of their pension provisions for later.
2. They can choose their pension provider themselves.
3. Pension awareness in the Netherlands will increase considerably.
4. It ensures transparency: everyone will know his or her pension situation immediately.
5. It will become much easier for self-employed persons to organise their pensions.

About BeFrank
BeFrank has been active in the group pensions market since 2011 and was the first Premium Pension Institution (PPI) to be incorporated in the Netherlands. BeFrank offers a straightforward pension, clear communications, online service provision and low costs. It is part of the Delta Lloyd Group.

More information: Isabelle van Ast. E-mail:, Phone: 020 5621118.