Explanation of pension agreements

A pension agreement is an agreement between the employer and ENNIA. As an employer, you can choose from 3 different pension agreements.

1. The benefit agreement: choose a fixed benefit amount.

With a benefit agreement, both the employer and employee know in advance exactly which pension benefit the employee will later receive. This is calculated on the basis of salary, years of service of the employee and an accrual rate.

ENNIA’s pension plan with a benefit agreement: Guaranteed Pension.

Advantages of a fixed pension benefit

Drawbacks of a fixed pension benefit

  • More clarity and security about the pension benefit
  • The pension benefit is predetermined and guaranteed
  • An employee can easily calculate their own pension benefit.
  • Less security for the employer about the amount of the pension premium
  • The pension costs are not transparent and difficult to control and budget
  •  Less security for the employer about the amount of the pension premium
  • The pension costs are not transparent and difficult to control and budget

 

2. The premium agreement: a fixed premium.

With the premium agreement, both the employer and employee know in advance exactly which premium needs to be paid for the pension. The amount of the pension benefit is not determined in advance. The premiums (after deducting risk premiums) are used to build up the pension benefit. The pension capital is used for the pension benefit upon the predetermined retirement date.

The pension plans with a premium agreement: Start-up Pension Plan and Budget Pension Plan.

The Budget Guaranteed Pension Plan is a combination of the benefit and premium agreements. The premium is predetermined and this amount is directly converted into a pension benefit for later. This means that both the premium and the pension benefit are exactly defined.

  • Less security for the employee about the amount of the pension benefit
  • The amount of the pension benefit is not predetermined
  • The amount of the pension benefit is calculated upon retirement

Advantages of a fixed premium

Drawbacks of a fixed premium

  • More clarity and security about the pension premium
  • The pension premium is predetermined
  • The pension costs are transparent and easier to control and budget
  • An employee can easily calculate their own pension premium
  • Less security for the employee about the amount of the pension benefit
  • The amount of the pension benefit is not predetermined
  • The amount of the pension benefit is calculated upon retirement

3. The capital agreement: choose a monthly premium and an insured amount.

The capital agreement includes an insured capital that becomes available on the maturity date for purchasing of pension(s). Due to its highly individual character, customization and regular maintenance is necessary.

A pension insurance with a capital agreement is: Individual Pension.