--- title: Transition Payment at Dutch State Pension Age description: Learn when the Dutch transition payment ceases at state pension age and what may still be agreed if employment ends before, on or after that date. author: Edwin van Jaarsveld url: https://vaststellingsovereenkomst.org/en/transition-payment-state-pension-age --- ![Transition payment at Dutch state pension age](https://vaststellingsovereenkomst.org/templates/yootheme/cache/17/shutterstock_499576012-1-gespiegeld-177f0f5e.jpeg) ## Are employees who have reached state pension age entitled to a transition payment? **In brief:** the employer does not owe a statutory transition payment where employment ends because the employee reaches Dutch state pension age (AOW) or another agreed retirement age. The precise termination date matters. If employment ends before the employee reaches state pension age and the employer initiated the termination, the ordinary statutory entitlement may still apply. Under a settlement agreement, the parties may also agree a payment voluntarily even where there is no statutory entitlement. In that case, describe it clearly as an agreed severance payment and record the amount, payment date and conditions precisely. ### The date makes the difference Always check whether the termination date falls before, on or after the employee’s state pension date. This may affect the transition payment, termination rules, pension and income arrangements. [Have your proposal reviewed for free](https://vaststellingsovereenkomst.org/index.php?Itemid=2418) ![Reviewing state pension age and the transition payment](https://vaststellingsovereenkomst.org/templates/yootheme/cache/79/photo-1561414927-6d86591d0c4f-79ff7f96.jpeg) **At a minimum, check:** - the employee’s official state pension date - the agreed or applicable retirement age - the precise termination date in the settlement agreement - who initiated the termination - whether a payment is statutory or agreed voluntarily - the relationship with pension and the rest of the final settlement ## Do not sign without checking the state pension date A difference of only a few days may be legally and financially significant. [Request a free review](https://vaststellingsovereenkomst.org/index.php?Itemid=2418) ## Why does the state-pension exception apply? ### Statutory exception The law provides an exception where employment ends in connection with the employee reaching state pension age or another retirement age. In that situation, the transition payment is not required by law. ### Dismissal before the state pension date If the employee is dismissed earlier, it is necessary to assess whether the ordinary rules on the transition payment apply. Consider how employment ends and who initiated the termination. ### Continuing to work after state pension age Special dismissal rules also apply where someone continues working after reaching state pension age. Do not draw conclusions solely from the employee’s age. ![Working around Dutch state pension age](https://vaststellingsovereenkomst.org/templates/yootheme/cache/de/photo-1526635090919-b5d79657c5a3-deaac38b.jpeg) ### Practical consequences under a settlement agreement Even without a statutory entitlement, a payment may form part of the negotiations. Also consider the final settlement, unused holiday, bonus, pension, release from work duties and legal costs. Clearly record that the employee has not resigned and check which income arrangements will be available after the termination date. [Close to state pension age? Read more](https://vaststellingsovereenkomst.org/index.php?Itemid=2771) ## Points to consider on dismissal around state pension age Open the items that are relevant to your situation. Termination date Compare the contractual termination date with the official state pension date and any agreed retirement-dismissal date. Reason for termination Clearly record why employment is ending and who initiated the termination. Transition payment or severance payment State whether the payment is a statutory entitlement or an amount agreed voluntarily. Salary and release from work duties Record until when salary and employment benefits continue and whether the employee will continue working. Unused holiday and holiday allowance Include the remaining entitlements separately in the final settlement. Pension and insurance Check the consequences for pension accrual and group insurance policies. Non-compete and non-solicitation clauses Determine whether these clauses will remain in force or lapse after employment ends. Reference letter and communications Agree the wording of the reference letter and the announcement concerning the employee’s departure. Full and final discharge Check which known and unknown entitlements will lapse under the full and final discharge. ## How to assess the state-pension situation ### 1. Establish the relevant dates Check the date of birth, official state pension date, retirement-dismissal clause and proposed termination date. ### 2. Determine the legal route Establish who is initiating the termination and whether employment ends before, on or after the relevant age. ### 3. Assess the overall package Consider the payment, salary, pension, unused holiday, contractual clauses and full and final discharge together. ## More about severance payments [Severance pay overview](https://vaststellingsovereenkomst.org/index.php?Itemid=2432) [Entitlement to a transition payment](https://vaststellingsovereenkomst.org/index.php?Itemid=2765) [Transition payment in a settlement agreement](https://vaststellingsovereenkomst.org/index.php?Itemid=2433) [What is a normal severance payment?](https://vaststellingsovereenkomst.org/index.php?Itemid=2788) [Settlement agreement and severance pay](https://vaststellingsovereenkomst.org/index.php?Itemid=2793) [Transition payment shortly before state pension age](https://vaststellingsovereenkomst.org/index.php?Itemid=2771) ![](https://vaststellingsovereenkomst.org/templates/yootheme/cache/df/edwinportret-gigapixel-low_res-scale-4_00x-df0dd30f.jpeg) About the author ### Mr. Edwin van Jaarsveld Edwin van Jaarsveld has over 20 years of experience with dismissal cases and regularly publishes about them. **Edwin’s expertise can also be found on:** [![](https://vaststellingsovereenkomst.org/templates/yootheme/cache/c9/linkedin-logo-c9bd4b88.png)](https://www.linkedin.com/in/edwin-van-jaarsveld-4746691b/?originalSubdomain=nl) [![](https://vaststellingsovereenkomst.org/templates/yootheme/cache/85/paroo2l-85019151.png)](https://vaststellingsovereenkomst.org/images/bekend_van/artikelen/Stel_bij_ontslag_alles_ter_discussie__Het_Parool1.pdf) [![](https://vaststellingsovereenkomst.org/templates/yootheme/cache/2e/ad-2eae40c9.jpeg)](https://vaststellingsovereenkomst.org/images/bekend_van/artikelen/Drugs_op_zak_maar_niet_gebruikt_Ontslag_op_staande_voet_is_wellicht_te_zwaar.pdf) [![](https://vaststellingsovereenkomst.org/templates/yootheme/cache/75/brisk1-75fa8d97.jpeg)](https://vaststellingsovereenkomst.org/images/bekend_van/artikelen/BC_-_Tien_tips_voor_werkgevers_bij_ontslag_wegens_disfunctioneren.pdf) [![](https://vaststellingsovereenkomst.org/templates/yootheme/cache/47/mtsprout-4785aa81.png)](https://vaststellingsovereenkomst.org/images/bekend_van/artikelen/Persbericht__Ontslag_op_staande_voet_een_weg_vol_risicos__MT_Sprout.pdf) ## Will your employment end around state pension age? Have the termination date, payment and other arrangements reviewed before signing. [Contact us](https://vaststellingsovereenkomst.org/index.php?Itemid=2445)