Do you need pension advice for a merger? A merger of a company can have a significant impact on the pension commitments of all involved employees. Meijer Pensioen is happy to assist you!

There are three forms to distinguish:

A. Legal Merger
B. Merger by exchange of shares
C. Corporate Merger

A. Legal merger

In a legal merger, the entire assets of one or more companies with the same legal form are transferred to another company. As a result of the merger, the merging legal entities, except for the acquiring legal entity, cease to exist. It is characteristic that the rights and obligations of the disappearing legal entity continue to exist and automatically transfer to the acquiring legal entity. This form of merger has no impact on pension commitments.

B. Merger by exchange of share

In the case of a merger by exchange of shares, there is a shift in control over a company, as a legal entity acquires a majority of shares in another legal entity through share transactions. Unlike control, the legal entity remains unchanged. The exchange of shares, therefore, has no consequences for the pension situation of the involved employees.

C. Corporate merger

A corporate merger occurs when the individual assets and liabilities (of a separate part) of a legal entity are transferred to another legal entity. This involves a sustainable consolidation of companies. The main rule, as stated in Article 7:663 of the Dutch Civil Code, is that the rights and obligations arising from the employment contract automatically transfer to the acquiring company when a company is transferred. There are several situations to consider during the transfer of a company and these will be explained and clarified below.

Pension Risk in corporate merger

In the case of a corporate merger, several rules from the Dutch Pension Act apply. Because pensions are part of the employment conditions, there are certain requirements and obligations for the existing pension scheme. For example, the old employer may still be jointly liable for fulfilling the obligations from the employment contract for one year.

Since the acquirer automatically takes over the existing pension scheme and is directly liable for it, it is important for them to know whether the existing pension scheme complies with all legal requirements, whether all premiums have been paid in the past (the old employer is only liable for one year), whether all employees have been enrolled as participants, and what the future financial obligations might be, such as value transfer.

Pension advice M&A

Do you need pension advice in case of merger & acquisitions (M&A)? Contact us, and we will tell you everything about it.