Simplified pension building for entrepreneurs

April 2, 2024

The Taskforce Income for Later has advocated for simplifying the process of building income for later years for independent entrepreneurs. This initiative aims to prevent them from facing financial difficulties after reaching retirement age. One proposed solution is to provide easier access to information regarding the maximum annual pension contribution. 

In a letter addressed to the outgoing Minister Carola Schouten for Poverty Policy, Participation, and Pensions, the Taskforce, comprising independent business organizations, the Chamber of Commerce, the National Institute for Budget Information (Nibud), VNO-NCW, MKB-Nederland, and the Association of Insurers, emphasized the need for action. 

Third pillar

The Dutch pension system consists of three pillars: the state pension (AOW), supplementary pension contributions via an employer, and supplementary individual pension insurances. Since many independent entrepreneurs do not automatically build pension funds through an employer, they are required to do so independently within the third pillar. However, various studies cited by the Taskforce indicate that independent entrepreneurs engage in this process to a limited extent. 

Research conducted by the online bank Knab revealed last year that 17% of self-employed individuals have made no provisions for retirement. This percentage rises to 27% for self-employed individuals with a disposable income below €2000 per month. 

Several factors contribute to this situation. Sometimes, alternative retirement provisions such as owning a business or real estate are in place. However, according to the Taskforce, lack of awareness and (fiscal) barriers also play a significant role. The Dutch Authority for the Financial Markets (AFM) has expressed concerns and highlighted the need for better awareness, accessibility, and comparability of pension products within the third pillar. 

Concerns regarding pension contributions among independent entrepreneurs have also been echoed in the Dutch Parliament. In December 2022, a motion was passed urging the government to explore possibilities, in consultation with the pension sector, to improve pension contributions for independent entrepreneurs without imposing mandatory obligations.


To address these challenges, the Taskforce has put forward recommendations to the minister. These include launching an information campaign tailored to independent entrepreneurs and establishing a neutral information hub. Additionally, independent entrepreneurs should have easier access to information regarding available tax-deductible pension contribution limits. 

Many independent entrepreneurs find calculating these limits to be time-consuming and complex, as it requires gathering various pieces of information. According to the Taskforce, the most effective approach would be to make the available contribution limits transparent during annual tax filings by the Tax Authorities. 

More flexibility

The introduction of the new pension law, approved by the Dutch Senate in May of the previous year, has relaxed fiscal regulations for supplementary pension contributions. Independent entrepreneurs can now set aside as much for supplementary pensions as employees with standard company pensions. 

According to the Taskforce, the implementation of the new pension law also presents opportunities to raise awareness about pensions among independent entrepreneurs, as the subject has garnered more attention due to the legislative changes. 

Brand New Day, a provider of supplementary pension products, observed earlier this year that both self-employed individuals and employees seeking to build supplementary pensions have taken advantage of the expanded tax regulations. This increased awareness has resulted in a significant rise in new pension investments in 2023 compared to the previous year.