Increase in deductible pension amounts

The increase in the minimum wage also increases the deductible amounts maintained within pension plans. In the following chart, the most commonly used deductible amounts:

A higher deductible has a number of effects:

• The portion of salary on which no retirement pension may be accrued increases. Thus, a higher deductible has a negative impact on retirement pension accrual.
• The portion of salary on which no survivor’s pension may be insured increases. Thus, a higher deductible has a negative impact on the amount of the insured partner’s and orphan’s pension.
• In defined contribution plans, employer and employee contributions are often expressed as a percentage of pensionable earnings. The pension base is the pensionable salary (read: fixed salary) less the deductible. If the fixed salary increases less than the deductible, then there will be lower employer and employee contributions. A lower employee contribution leads to higher net disposable income on a monthly basis, which is nice, but ALSO to a lower pension contribution.
• Perhaps needless to say, the above effects are of course partly dependent on the amount of the (possible) increase in (pensionable) salary as of 01-01-2023.

Increase in state pension benefit

Although we have to get older and older in order to qualify for state pension benefits, the state pension benefit is rising sharply:

Combined with the indexation of retirement pensions as recently applied by most pension funds, retirees can count on a higher retirement income.

Increase in maximum pensionable salary

Perhaps not relevant to everyone, but the increase in the maximum pensionable salary is also significant and has an impact.

For the higher-salaried, there is more room to accrue retirement pensions and insure survivors’ pensions. Note: This increase more than makes up for the adverse impact of the increase in the franchise!

Please allow for higher employer charges.

And don’t forget that in line with this higher maximum pensionable salary, the “Net Pension Plan” must be adjusted.

Increase in maximum daily wage

This amount also increases significantly:

The increase has the following impact:

• Take into account higher employee insurance charges.
• Employees will continue to participate in WGA gap insurance longer and be less likely to be eligible to participate in WIA top-up insurance.
• And of certain existing WIA excess insurance participants, it will end participation in WIA excess insurance; they will “revert” to WGA gap insurance only. Note: Ending participation in WIA excess insurance will likely be accompanied by the familiar “stop letter” from the insurer in question. Avoid all kinds of questions from your employees and inform them in a timely manner.

And what does the income tax rate do?

The government wants to make work more rewarding, including by adjusting the first tax bracket and the corresponding income tax rate:

Impact on the paycheck

And what is the impact on the employee’s paycheck of all this? We will experience it in January.