Pension scope of application investigation

How do Dutch industrial pension funds work? And how can a pension scope of application investigation help your company?

Dutch pension, employers, employees and the industrial pension fund

In Holland employers and employees in a certain industrial negotiate about employment conditions. These conditions are registered in a collective labor agreement. The agreement also contains arrangements with which a pension plan must comply and who the pension provider has to be.

Often this is a certain industry pension fund for which participation is legally mandatory for employers and employees in that industry. Therefore it is very important to know whether your company is covered by a collective labor agreement (CAO) and whether your company should be affiliated with a mandatory industrial pension fund. For these purposes we conduct scope investigations for companies. But also on behalf of lawyers or accountants for their clients.

The industrial pension fund and our scope of application investigation for companies

Often it is not hard for us to determine whether a company must be affiliated with a certain industrial pension fund by comparing the company's activities with the industrial pension fund's scope. In the scope is stated which activities are covered by the obligation of that industrial pension fund. 

However sometimes it is harder. For instance a supermarket is covered by the pension scheme from Pensioenfonds Detailhandel (retail pension fund), However, the supermarket's butcher may be covered by the Pensioenfonds Slagerij (butchers pension fund). This is only true if the butcher in the supermarket actually processes the meat. It does not apply when the butcher only packages the meat. The butcher's work related activities must be investigated thoroughly in order to determine which pension scheme from which mandatory pension fund applies.

There are many "if this, then that" situations.  We can investigate and discuss which situation applies to you and your company,  As a matter of fact we should periodically check whether your company's situation is still the same. If your business activities change, you may still fall under the scope of an (other) industry-wide pension fund.  

It is good to let us perform the scope of application investigation and inform us when business activities change within your company. This way we can map out the impact on your company's pension plan. If your company is covered by an industry-wide pension fund, you have no say in the content and implementation of their pension plan. You are obliged to participate with this pension fund.

The employee can claim pension

When an employee can show that he worked for a company that should have been covered by an industrial ipension fund, the employee can claim pension benefits without having paid any premium. The pension fund will recover the resulting loss from the employer. A non-member employer is therefore a major risk for an indsutry pension fund.

Participation can be claimed retroactively by an industrial pension fund

This also applies to the premium. The extent to which a BPF will impose a premium bill with retroactive effect depends on the circumstances. It is important to determine since when you have been performing the activities under the obligation and/or if the obligation has been changed during the course of time. Identifying the risk of this retroactive effect is an important part of a comprehensive scope investigation. Case law4 shows that this risk can go back many years. By definition, this aspect deserves close attention. Retroactivity can involve many years of premium. Based on Art 3:310 of the Civil Code, a BPF has the possibility to claim damages with a retroactive effect of 20 years.

Pension scope of application research for your company?

What if you have been flagged by an industry pension fund?

If you have been flagged by an industry pension fund, it is crucial to determine your strategy. You only need to provide data when it's clear that your company is under their scope. It is recommended that you conduct an independent scope of application research. Neither your own pension advisor nor the industry pension fund are independent. 

Having an investigation carried out after you have been contacted by a BPF involves more risks and uncertainty. In addition, according to Art. 4 Wet Bpf 2000, you are obliged to act upon the results of the investigation, regardless of the consequences for your business operations.  

One of these three conclusions follows from the scope investigation:

1. Affiliation is not mandatory;

2. Affiliation is mandatory;

3. Research does not provide sufficient conclusive information.

Unfortunately the last outcome can't always be avoided. In the extreme it is up to the sub district court to give an opinion on this matter. Right now there are many lawsuits about interpretation issues. Industry pension fund issues and scope of application research in particular are complex legal cases. Incorrect or not well-founded conclusions can complicate the situation considerably.

Conduct preventive / validation scope investigation for your company 

By conducting a preventive or validation scope of application investigation, you can identify the risks of a mandatory registration with an industry-wide pension fund. Case law shows that the retroactive effect of participation in an industry-wide pension fund/ collective bargaining agreement can go back as far as 20 years, with potentially very far-reaching consequences for your company. 

Business operations are subject to change as well. As a result, it is possible that changes will be made to the criteria mentioned and that your company will fall under a different industry pension fund/ collective labor agreement. If this is the case, scope investigation carried out as a preventive measure is hihgly recommended.

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Costs of a company pension fund scope research

Costs of a company pension fund scope of application

The costs of a scope of application investigation strongly depend on the type of study and the duration of the investigation. After a first impression of your case we can make a rough estimate of the costs. Unfortunately we cannot determine that in advance. Please contact us to discuss the possibilities for your case.
Scope research. Why BPF-CAO Auditbureau

Why BPF-CAO Auditbureau?

The quality of the scope investigation is essential given the complex, legal area in which it takes place. With 30 years of experience in the legal and actuarial background of pensions, our experts possess the required knowledge for a strong substantive scope investigation.

Pension scope of application research for your company?

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