What should you do with your old group insurance when you have changed employers?

When you leave employment you first receive an overview of your group insurance (the benefit statement or pension slip). On it you will find all your guarantees, premiums and capital amounts, recalculated as a result of your departure from service. But... as mentioned, alongside this slip you also receive a document with choice options “what to do with my saved reserve?” as a result of the departure from service.

Option 1: leave your saved reserve in the old policy of your former employer. This is usually the best option, but do forward your choice form to us anyway!

In general the best option is to leave the capital “premium-free” with your previous employer: the saved amount remains insured and will continue to accrue interest but no more premiums are paid. In general it will be the case that if you tell the insurer nothing, the reserve stays under the plan of the old employer. The advantage of this is:

- that the guarantee of the “old” interest rates is retained, - and, most people do not know this, that your former employer indirectly grants you a capital guarantee (so 0% return) from the moment you leave service. And that in addition to (or on top of) the guarantee of the insurer. You enjoy a kind of double safety net.

Is it not annoying then that you once again have a separate policy running with a little savings pot in it? Not really. Because you keep the overview of what you have built up in the second pillar via MyPension. So the argument “keep the overview” need not be an obstacle to leaving the policy where it is.

A possible disadvantage is that you have to check the death cover. If you leave your reserve in the plan of your old employer, then it could happen, in a rare case, that your death cover falls away without you fully realising it. The insurer is legally obliged to make you a proposal to keep your death cover (that then goes via a reception structure, see below), but many members do not read the insurer's letter, or do not read it properly, or do not always understand the importance of what can be read on that document. For this it is best to forward the insurer's proposal to us, then we will check it for you.

Another possible disadvantage is that you are effectively subject to the decision of your previous employer. This is very exceptional, but it does happen... suppose that within 10 years your former employer decides to transfer its group insurance collectively from (just to say something) insurer A to insurer B. Then your reserve will also be transferred, or you will at least receive a letter informing you that your reserve is being transferred. At that moment you could still choose option 2.

Option 2: transfer to a reception structure. This is rarely the best option, unless interest rates were to start rising sharply again, and unless you have no confidence in the financial soundness of the pension institution under which the money falls.

Another option is to transfer the saved amount of your group insurance to the “reception structure” of the insurer of your new employer, or of the old employer. This happens without any deduction or cost. So if you have saved 1.000 euro in your group insurance, then that 1.000 euro goes entirely into the reception structure. A reception structure is a kind of giant car park on which discontinued contracts are parked until the moment you take up your pension. So a separately set up formula that allows you to have the saved amount managed as a separate pension pot. The advantage is that there is always a counter-cover on death, but the disadvantage is that the reception structure will very often invest your money at a lower interest rate.

Option 3: your insurer will also offer you an option to transfer the reserve to a so-called “KB69 institution”.

This was an old predecessor of the reception structure, and is rarely still used (for an exceptional transfer of foreign supplementary pensions it is still occasionally used).