Starting from July 1st of this year, the Future Pensions Act will enter a transitional phase that will last several years. During this phase, employers and employees will collaborate to make adjustments to their pension scheme, which will then be implemented by pension providers.

The new act has three main objectives:

  • to increase the supplementary pension at a faster rate,
  • to provide a more personal and transparent pension accrual,
  • and to create a pension system that is more compatible with the fact that people today tend to change jobs more frequently.

Despite these changes, the fundamental principle of the law remains the same: pensions will continue to be built up jointly, and financial risks will be shared between employers and employees. Contributions will still be paid by both parties, and pension providers will invest these funds and make pension payments.

Under the new pension system, pension providers will have the option to use investment returns to increase pensions more rapidly. Conversely, if the results are disappointing, pensions can be reduced because the new law provides "buffers." To account for economic fluctuations, a portion of the contributions will be set aside for uncertain times.

Moreover, the new pension system offers more clarity on how much pension is accrued. A member's pension will consist of all contributions made on their behalf, plus the return generated by these funds. In the previous system, the majority of pension accrued at the end of one's career, resulting in a subsidy from younger employees to older ones. This had significant consequences when changing jobs or facing unemployment at the end of one's career. The new law aligns better with the current reality where people no longer work for the same employer for 40 years.