Pseudo Self-Employment Series – Episode 3: Pension Funds and Contractors?

📌 A Reader’s Question: Pension Funds and Pension Obligations

One of our readers asked us:“If I am later classified as an employee instead of a contractor, what about pension funds? Do I then have to pay pension contributions after all?”

A very relevant question – and one that is often overlooked in the debate on pseudo self-employment.

Industry-wide pension funds and mandatory participation

In many sectors in the Netherlands, a mandatory participation decision applies. This means that employers in that sector are obliged to join an industry-wide pension fund (BPF). These funds are comparable to occupational pension schemes in the UK, but in the Netherlands participation often is mandatory for entire sectors.

The associated pension scheme then determines who falls under its coverage.

For a principal working with contractors, this may not seem relevant at first. But once a court rules that there is in fact an employment relationship, the pension fund may retroactively claim pension contributions.

Four scenarios – from low to high risk

No employment contract + no mandatory participation→ No pension obligation here. This is the safest scenario: genuine independence and no industry-wide pension fund.

Employment contract + no mandatory participation→ There is an employment contract (with consequences for taxes and social security), but no obligation to participate in an industry-wide pension fund.

No employment contract + mandatory participation→ Grey area. Even if the court rules that there is no employment contract, a fund may still say: “Your activities fall under our sector, so you belong with us.”

Employment contract + mandatory participation→ The highest risk. If a contractor is classified as an employee in a sector with mandatory participation, the fund may claim contributions retroactively – often up to ten years, including interest and penalties.

Retroactive effect and consequences

When an industry-wide pension fund claims contributions, this usually happens retroactively. For the principal, this means a substantial financial burden: not only the employer’s share, but often also the employee’s share must be paid.

For the contractor, this can also have indirect consequences, such as additional tax assessments or the loss of previously claimed tax benefits for entrepreneurs.

What does this mean for you?

A solid Contract for Services cannot prevent a pension fund from knocking on your door. But it does strengthen your position. It shows that you consciously chose self-employment and that you have laid down arrangements that minimize legal and fiscal risks.

Without a contract, you stand empty-handed. With a contract, at least you have basic protection and increase your chances of defending yourself against reclassification and against forced participation in an industry-wide pension fund.

The essence in bullets

• Pension funds look beyond the contract alone.

• Four scenarios determine the risks, from low to high.

• You may win the employment contract debate, but still owe pension contributions.

• Contribution claims can go back many years and become very costly.

• Civil claims back and forth? Not unthinkable.

• No time to work: plenty of time for letters and procedures.

The reader’s question

Our reader asked: “If there is no employment contract, can a pension fund still oblige me to participate?”

The answer is: yes, it can – depending on the sector and the pension regulations. This is exactly why it is so important to clearly define your position.

What does this mean for you right now?

If you want to reduce these risks, a good Contract for Services is essential. With the right model agreement you minimize the chance of reclassification and its costly consequences.

👉 Contract for Services – for contractors

👉 Contract for Services – for principals

🔜 In Episode 4, another important topic will be discussed.