14 February 2019

Pension funds can limit the risk of incorrect communication creating additional rights

The Court of Appeal of The Hague recently ruled that a letter with incorrect information provided by a pension fund to a participant prior to his early retirement did not constitute a legally binding act. The pension fund was allowed to continue paying the regular pension scheme benefits to the participant. A relevant factor in this case was that the pension fund had included a caveat in a letter that the participant could only derive rights from the pension scheme rules. According to the appeals court, the participant could not have reasonably deduced from this letter that the pension fund intended to provide the participant with more or other rights than those set out in the pension scheme rules. It remains unlikely that pension providers will have to award additional rights on top of the regular entitlement even if they provide incorrect information. However, to limit this risk it is advisable to include a caveat in any communication to pension scheme participants.

This article is available in Dutch only, please click here to read it.

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