Dutch pension funds feel optimistic about their preparations for the transition to the new pension system but still have “a lot of work to do”, according to research by BDO Accountants & Advisers.

BDO found that one in five funds have not yet decided whether they will transfer the accrued pensions to the new system.

Furthermore, a quarter plan to postpone transferring accrued pensions until 2026/27.

“This creates a peak load and possibly a congestion, particularly at pension administration organisations, supervisors and advisers,” warned BDO partner and Financial Services Industry Group chair, Geertje Strampel.

“That is a serious risk of delay and is already putting pressure on the feasibility of the pension transition.”

BDO’s analysis also found that while 84 per cent of pension funds felt they were well prepared, a third also expected that they would not meet the target date in 2027.

Furthermore, 13 per cent of pension funds had not yet involved pension administrators in their plans.

“The sooner the better applies in this case,” said BDO senior manager financial services, Ryan de Waard.

“Collaboration leads to shared ownership of the transition process. The [pension administrators] must be given sufficient time to implement the new scheme per fund.”

More than half (52 per cent) of the pension funds had not yet made a choice for the type of contract they will use, and almost a third have not yet started the risk preference survey they must be done by law at least once every five years.

“How much risk are participants willing and able to run?” asked Strampel. “That question is more relevant and more extensive than ever.”

BDO noted that pension funds were also faced with uncertainty about their buffers and whether to index pensions or not in the build up to the transition.

Nearly half of pension funds believed that implementations costs would increase rather then decrease, with De Waard stating that small funds may soon face major financial challenges if costs increase.

De Waard added that there was still room for improvement on data quality.

“The devil is often in complex mutations and manual processing,” he continued.

“We see that errors in data now mainly emerge as a result of data-oriented investigations by the fund or complaints from participants.

“It is important that the data is correct. After all, the data form the basis for the distribution of the pension money over the personal pots.

“This must be done in one go and properly. After the transition, a change cannot be made with retroactive effect.”

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