Compensation solution BeFrank nominated for Pension Pro Award 2025

We have started a major transition to a new pensions system. An important part is that everyone has to move to a flat rate. Employees who will lose out as a result must be compensated. For this purpose, BeFrank developed an automated compensation solution in which both employers and employees can make choices. This solution has now been nominated for the Pension Pro Award in the ‘Innovation’ category.

The Future of Pensions Act (Wet toekomst pensioenen, Wtp) stipulates that employees who are disadvantaged by the transition must be compensated in an ‘adequate and cost-neutral’ manner. This can be done within the pension agreements or, for example, by paying additional salary. An employer can carry out the compensation in a number of ways. Our experience over the past two years has been that employers who switch to a Wtp scheme compensate in salary. This solution is frequently chosen and offers employees more flexibility, but it also brings challenges:

• How do you ensure that the compensation in salary actually goes to the pension?
• How do you give employees insight into and guidance in making the right choices?
• How does the employer/advisor calculate the compensation and how is this communicated in a way employees understand.
• How do you ensure the correct recording and processing in the payroll system as an employer?

What solution does BeFrank have for this?

As a pension administrator, we have an important role to play in clearly guiding the transition and the compensation issue for employers and employees. That is why we have developed a solution that allows employers to switch entirely to a Wtp scheme with a flat rate, where the commitment for employees remains the same. Employers can choose between individual or collective compensation. In both solutions, the compensation percentage is deposited in the pension scheme as standard and this process is fully automated.

Individual versus collective compensation

In the case of individual compensation, the pension advisor calculates per employee whether they will lose out on part of their pension. If this is the case, the employee will receive an individual compensation percentage. In the case of collective compensation, the difference between the old (ascending) graduated scale and the new (flat) graduated scale is converted into a compensation percentage per age group. The advantage of collective compensation is that it is easier to arrange. The compensation does not have to be calculated per person first. This also saves administration. Communication with employees is also simpler and more transparent, and there are no differences in the workplace.

Choice guidance

After the start of the new scheme, employees will receive an e-mail from BeFrank about the compensation and their options. The e-mail contains a link to the personal pension page, where employees can gain insight into the effect of the compensation on their pension. We help employees to make choices in this regard by providing clear guidance. They can see:

• Why they receive compensation and why the standard is deposited into the pension scheme
• Which choices employees can make: make contributions for full compensation, more/less or no compensation
• What effect the choices have on the employee’s expected pension

The choices made are then automatically processed in our pension administration and passed on to the employer’s payroll system.

Through BeFrank’s automated compensation solution, we offer employers choices and convenience in the transition to the new system. But even more importantly: we guide employees using clear tooling to make a choice that is appropriate to their own situation.