Pension funds are postponing the switch to the new system

This article was last updated on May 29, 2024

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Pension funds are postponing the switch to the new system

The number of pension funds switching to the new pension system as of January 1, 2025 has fallen sharply. This is evident from a survey by De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM), which asks pension funds every quarter about their progress regarding the transition to the new pension system.

Seven funds have now submitted their transition plans to DNB. Of the remaining 177 pension funds, only three plan to switch systems early next year. Another four funds want to make the step by mid-2025. This brings the total to 14, while six months ago 25 pension funds had the ambition to start the new system in 2025.

The vast majority of pension funds, 74, are now aiming for 2026 for the switch. The number of funds that do not want to join until 2027 has more than doubled compared to six months ago: from 21 to 44. The switch must be made no later than January 1, 2028. Five funds are now focusing on this.

This is going to change with your pension money

Although the moment of switching to the new system is being pushed back, DNB and AFM do not expect that postponement will also lead to adjustment.

The number of funds that will use the pension transition to close as an independent fund remains at 20 percent. This mainly concerns company pension funds for (former) employees of a specific company who quit. They then merge with another fund or no longer admit new participants, causing the fund to slowly become smaller.

Political unrest and complicated calculations

The political unrest over the pension law in the past six months may have played a role in the decision to make a later switch. For example, NSC wanted a participant referendum per pension fund in which the participants help determine whether or not to switch. There is nothing more to be found about this in the coalition agreement.

In addition, the transition to the new system is a huge operation. About 1,500 billion euros are in the pension pots of all Dutch funds. This must be divided between personal pension pots. This requires a complicated administrative intervention, which funds do not want to make mistakes.

Strict attention is also paid to whether the money is distributed fairly among the different generations within a fund. This requires an extensive process of consultation with the social partners and assessment by the DNB and AFM.

‘Care for speed’

It is a complex process, says the Pension Federation, which represents the interests of almost all Dutch pension funds. Consultations with social partners must be conducted carefully, IT systems must be adapted and participants must be well informed. “Pension funds are all different,” says chairman Ger Jaarsma. “So it is not one size fits all. Care takes precedence over speed.”