The option for pensioners to take up to 10% of the pension in one lump sum has been postponed again. The expected effective date will now be July 1, 2025.In addition, the future of the RVU threshold exemption is currently unclear. This exemption allows employees to retire early without the employer facing the RVU penalty tax of 52%.
Elective lump sum deferred to July 1, 2025
As of July 1, 2025, employees will have more freedom of choice in the use of their second-pillar pensions. It will become possible for employees to withdraw part of their pension assets at once once once they retire.
Pension providers have indicated that they need more time to inform participants about the consequences of withdrawing a lump sum. After all, they have a considerable duty of care. In addition, there are still concerns among pension administrators that there is insufficient time to actually implement the new option scheme. The introduction has therefore again been postponed (this time to July 1, 2025).
Practical implications
Withdrawing part of the pension benefit in one lump sum can be useful, for example, to pay off any mortgage debt or from the desire to make a major expense. However, this commutation can also affect income-related settlements, such as rent or healthcare benefits and the applicable tax rate. It should also be kept in mind that if a one-time higher benefit is received at the beginning of retirement, future pension payments will be lower. This requires an informed decision.
RVU threshold exemption
Many have noticed in recent weeks the strikes in various sectors for early retirement for people with heavy occupations. These strikes are taking place because the current RVU threshold exemption expires on Dec. 31, 2025, and it is not yet clear whether the scheme will be extended.
In short, the current regulation amounts to allowing employees to receive a benefit from their employer that allows them to retire early up to 36 months before reaching the state pension age, subject to conditions. To make this possible, a threshold exemption applies. Up to the amount of this exemption, the employer does not have to pay an additional RVU levy of 52% on the benefit.
Practical implications
At the moment, consultations between the SSW Ministry and unions seem to be stuck and it is likely that strikes will continue. We will keep an eye on developments.
In conclusion
Do you have questions about the changes, or are you curious about the possibilities in your specific situation. Please feel free to contact us via the contact form below or with your own Govers contact person.