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The money dilemma: leave all those pension pots as they are or throw them together? | NOW

Is it better to pay off or save, go for solar panels or a heat pump, or not hire a broker? In the section The money dilemma we put two alternatives side by side. This time: is it wise to lump all your pension money together?

If you have ever worked as an employee, chances are that you have saved one or even more ‘dormant’ pension pots. These are premiums that you previously deposited with a pension fund or insurance company to which you were affiliated through work, and into which you no longer deposit money. This is usually because you left an employer.

If you start with a new boss, you will most likely build up pension again – nine out of ten employees build up pension through work – and there is a good chance that this will be with another administrator. The Netherlands now has nearly twelve million dormant pension pots, according to the most recent CBS figures. In addition, there are about seven million active, in which people pay a monthly premium.

Cleaning up all the small pots

When you log in to you will see a list of colorful icons; the logos of the pension funds with which you have accrued pension in the past. You can clear this up if you want, by so-called value transfer. This means that you transfer dormant pension entitlements to the administrator, whereby you now put in money every month.

“Value transfer makes it clearer, so that it is easier to see how much you have built up for retirement,” says financial planner Anja van Zandbergen. “With many pension insurers, the right to a survivor’s pension also lapses in the case of dormant pension pots, so a transfer can also be interesting.”

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Another reason for value transfer is that your current pension fund or insurer is very good at investing in your pension money, so that your premium yields better than in your dormant pension pot. This continues to gamble; how an operator has performed in the past says little about future results.

Checklist for value transfer:

  1. Compare the conditions of your current administrator with those of the dormant pension pot that you may want to transfer. Which has the best funding ratio, forecasts, the cheapest survivor’s pension, and from what age will the pension be paid?
  2. Is the transfer still interesting? Request a quote from your current pension fund or insurer. This will give you an idea of ​​how much your old pension entitlements will be worth to the new administrator.
  3. Is it worth switching? Sign the quotation and your new and old contractors will take care of the rest. This entire procedure can take anywhere from a few weeks to more than a year.

Value transfer is free and pension providers are obliged to cooperate according to the Netherlands Authority for the Financial Markets (AFM).

But there is one exception: if the funding ratio of the old or new fund is below 100 percent. Then you cannot make a transfer. That is now the case at ABP, the largest pension fund. There are currently 34,000 requests waiting, says spokesman Jos van Dijk. “The requests are piling up on yes. We receive about two thousand new requests per month.”

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You can always send a transfer request to a pension fund or insurer, even if the funding ratio is currently too low. Applications will then be processed as soon as the pension provider has sufficient cover again.

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