The Dutch pension fund ABP, for those working in the public sector and education, has published its draft transition plan, with the fund targeting to switch to the new scheme on 1 January 2027.

ABP and the scheme’s social partners have agreed on what the new scheme should look like, with four associations giving their opinions on the draft plan. ABP intends to submit its final transition plan in mid-April to union members.

The pension fund has opted to transfer to a solidarity-based scheme, rather than a flexible scheme, as this type of scheme offers more opportunities to share risks. As part of this, a solidarity reserve will be created upon transition to the new scheme. This will help keep pensions stable during poor investment years, ABP stated.

The pension fund is aiming for a coverage ratio of 110 per cent at the time of transition. At a coverage ratio of 110 per cent, 100 per cent will go to members' pension pots, 4.5 per cent will go to the solidarity reserve, 3 per cent will be used for compensation for people who lose out (compensation for the abolition of the average system) and 0.75 per cent is intended to provide compensation because pensions have not increased for a long time.

In addition, 1.5 per cent is needed to meet the legal requirements for minimum required capital and filling the operational reserve. Finally, all current and future pensions will increase by 0.25 per cent.

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