The Dutch Federation of Pension Funds (Pensioenfederatie) has advised pension funds not to display personal pension pots to retirees, warning that doing so could cause confusion and is not required by law.

In guidance published on its website in response to a debate on the issue, the federation said most Dutch pension funds have already decided not to show a personal pension pot to pensioners in either a solidarity premium scheme (SPR) or a flexible premium scheme (FPR), which are collective schemes.

It argued that a personal pension pot has no practical meaning for pensioners, as it is simply an administrative step used to calculate pension payments. It stressed that displaying the value could therefore create unnecessary questions and misunderstandings.

The federation warned that showing a declining pension pot could give retirees the impression that their pension savings may eventually run out, despite pensions continuing to be paid for life through collective risk-sharing.

It also noted that, in a solidarity premium scheme, part of a member's pension pot is transferred into the collective solidarity reserve when they retire, while the reserve itself can sometimes be negative, making it difficult to explain.

Under Dutch legislation, pension funds are required to inform pensioners about the amount of their pension and any changes to it, such as increases or reductions.

They must also explain how retirees can request additional information, including details about the collective assets backing pension payments, but are not required to disclose an individual pension pot.

The federation recommended that pension funds continue to display personal pension pots only to active and deferred members.

It suggested placing general background information on individual pension pots in a separate section of a fund's website or in a dedicated newsletter segment.

The federation also recommended that pension funds clearly signpost where pensioners can find information on the total assets backing pension payments and the solidarity reserve.

It also encouraged schemes to explain to members approaching retirement what happens to their pension pot when they retire, making clear that it becomes part of a collective pool of assets used to pay pensions, after which only the monthly pension benefit is shown.

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