Lump Sum Payment, Early Retirement and Leave Savings Scheme Act

A number of components of the Lump Sum Payment, Early Retirement and Leave Savings Scheme Act (Wet bedrag ineens, RVU en verlofsparen - hereinafter: the Act) went into force with retroactive effect on 1 January 2021. The Act offers employers the possibility of agreeing arrangements for early retirement with older employees.

Early Retirement Scheme (hereinafter: RVU)

Effective 1 January 2021, employers have the option of making a lump-sum payment without paying a pseudo final levy of 52%. Between 1 January 2021 and 31 December 2025, employers may offer older employees who are thirty-six months or less from their state pension age a gross RVU payment of no more than EUR 1,847 per month (amount for 2021).

This maximum RVU threshold exemption may also be used for part-time employees. The employer will owe an RVU levy of 52% for payments made outside of this context.

Taking leave

In addition to the relaxation of the RVU payment, as from 1 January 2021 older employees may save up to one hundred weeks of leave (formerly fifty weeks). This concerns leave accrued over and above the statutory minimum, such as unused holiday leave or compensatory time. This leave may be used to stop working earlier or to take longer interim periods of leave prior to the state pension age, without this qualifying as RVU.

In addition, the following:

The Act does not prescribe how the payment of an RVU should be arranged, but the legislature deems a monthly RVU payment the most desirable for an employee.
Taking leave as discussed above is possible prior to any RVU.
If the employee still has tax scope for the accrual of pension, the employer may also make a one-off deposit in the pension scheme. This does not qualify as an RVU and therefore is not part of the amount against which the RVU threshold exemption is assessed.

Subsidy for RVU

The temporary customised arrangement for sustainable employability and early retirement (hereinafter: the MDIEU) also went into force on 1 January 2021.

The MDIEU offers all employers in the Netherlands a subsidy option, subject to further conditions, for activities related to sustainable employment and RVUs. An application for subsidy is submitted by a collective as referred to in the MDIEU. Subsidy may be granted for a sector analysis and for activities included in a plan of activities.