Now that the Senate has approved the new pension law, it is the turn of the pension funds. In the coming years, they must ensure that the Dutch pension assets of approximately EUR 1,400 billion are distributed as fairly as possible over more than 10 million personal pension pots. A monster operation, in which the funds have already spent quite some time.
PNO Media started preparations two years ago, says José Claus, chairman of the executive board of this fund (about 65,000 participants). The fact that politicians have finally agreed does not mean that all kinds of new processes are suddenly started. There is especially relief that all the preliminary work does not have to go into the trash.
Employers’ organizations and trade unions, the so-called social partners, are now the first to act. They must come up with a transition plan. It contains all major choices that have been made about the new pension system for their supporters, such as the form of the scheme and whether all participants will join the new pension system – the ‘going into’. Only if it turns out very unfavourably, some pensions will not be transferred to the new system.
Solidarity reserve
For example, the social partners choose between a flexible or a solidarity contribution scheme. With the latter, part of the pension assets are set aside for a solidarity reserve. The fund can draw on this to keep pensions up to standard in less favorable times. The plan also contains agreements on how this solidarity reserve should be built up and when it may be used.
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It is not the case that the transition plans will soon be unexpectedly delivered to the pension funds. Recently, they have been contributing ideas ‘under the hood’ during the discussions about the choices, says David van As, director of the Bpfbouw construction pension fund (nearly 800,000 participants). “We are not about the choices, but the final plan must be feasible for us.”
At PNO Media, the actuaries, the insurance accountants, are already hard at work, says Claus. “Social partners can have a lot of ambition, such as a high pension benefit. But does that choice remain if it turns out that the premium then rises too much?”
For most funds, the plans must be ready this fall and approved by the pension boards at the latest early next year. This is necessary to meet the intended start date. Although pension minister Carola Schouten (ChristenUnie) promised last week in the Senate to postpone the final starting date by one year to 1 January 2028, the funds would like to switch to the new system earlier, so that they still have room to deal with unforeseen problems. PNO Media and BpfBouw rate 1 January 2026 as the ‘starting date’, the day on which the pensions are converted into the personal pots.
Not all problems that may arise in the coming years are unforeseen. The tension lies precisely in the existing shortages of actuaries, whom all pension funds rely on for timely calculations, and in a lack of IT professionals. Before the operation, pension administrators must reconfigure their computer systems or purchase completely new systems. “I am glad that the deadline has been postponed,” says Gerard van de Kuilen of the hairdressers pension fund (approximately 150,000 participants). “There was pressure. Although things look good for us in terms of IT.”
Risks when investing
Participants and pensioners in the new pension system also have something to say. Using ‘risk preference surveys’, pension funds ask how much risk policyholders are willing to take when investing. Among hairdressers, this research started at the beginning of May. “Participants are shown slides with which they can indicate what they would consider a reasonable pension,” explains Van de Kuilen. “With more risk, the chance of a higher pension is greater, but it can also be lower in the event of an economic setback.” The pension fund translates the results of the research into investment policy and the distribution of returns over the pension pots.
In order to keep all employees and pensioners well informed about the new system, PNO Media will be communicating intensively with its supporters. “We have not done that extensively so far. We didn’t want to cause unrest, while the law had not yet been passed and much was unclear or not yet established,” says Claus. “But as a fund for the digital and creative sector, we find communication extra important.” And there is a rush: “The intention is that from January 1, 2024, people will be able to withdraw 10 percent of their total assets in one go at the start of their retirement. We should already be informing about this: what are the consequences for, for example, allowances if you receive such a sum of money in one go? And what does the benefit do with the rest of your pension amount?”
That communication is also important to prevent legal proceedings, says Van As of Bpfbouw. “A distribution issue is always susceptible to objections,” he points to the prediction of courts, united in the Council for the Judiciary, that pensioners may go to court en masse because the pension they have been promised for years is lower in practice. “We must be able to explain clearly what we do and what choices we make. Fortunately, Bpfbouw has been able to index well in recent years, which helps to create trust. So I don’t expect too many objections.”