If small and medium-sized enterprise (SME) employees do not have their employer update its pension plan to comply with the new regime, they will face substantially lower pension benefits as a result of their company not implementing the changes. Because the employees themselves do not administer the pension plans for their employer, the delay in making the necessary post-implementation changes to the plan will cause the employees to be adversely impacted. Therefore, employees should check with their employers to ensure their pension plans are being updated promptly.
2 days Ago
Urgent Call for Employers to Act
All industry experts are urging employers to take immediate action, or face significant challenges caused by the likelihood that time is running out. Harold Herbert, a member of the VvV Board, warned that the timelines are rapidly approaching and may become very tight by the middle of the year. He advised businesses that independent advisers are available to assist them in evaluating alternative pension plan options and in selecting an appropriate insurer.
However, if employers take too long in making their decisions, likely that there will not be enough qualified independent advisers available to meet the demand.
Currently, approximately 20 percent of employees, primarily SME employees, have pensions through an insurer or a defined contribution pension plan. Employers must take action to transition these employees' plans to the new pension plan; however, there are many SMEs that have not yet taken action to do so.
According to data from the VvV, there are approximately 36,000 SMEs that have not yet transitioned their plan to the new pension system, while 19,000 have already made the transition. In general, organisations with more than 50 employees and those with access to significant pension funds are much further along in successfully transitioning to the new system than those with fewer than 50 employees.
Deadlines and Financial Risks
The employers must have f.
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