A major reform of the Dutch pension system is a step closer following the submission of the legislative proposal.

Pensions Minister Carola Schouten sent the Future Pensions Act to the House of Representatives yesterday, 30 March. The Dutch Pension Federation said it is “an important step towards a future-proof pension system”.

Aon Netherlands has also welcomed the “milestone” being reached and noted that the bill is largely in line with the consultation document, with changes relatively limited.

Dutch Pension Federation chairman, Ger Jaarsma, said: “It is good to see that parliament can now consider the important system change. The new system makes it clearer what pension funds do for members: invest the contributions paid in and make more of them.

“Those returns on investments will flow back more directly to the accrued pensions. Participants can see this effect on their pension statements. And because we are moving from a pension commitment to a pension expectation, pension funds no longer have to calculate how much capital they should keep in cash on the basis of a risk-free interest rate. That makes the pension system simpler and the assets in the fund are released sooner.”

Jaarsma added that the federation is pleased to see improvements compared to the consultation document.

“Explainability and feasibility are the most important themes, as is sufficient scope for pension fund directors to make choices that are in the interest of their specific group of participants. Now it's time for the next step. Pension funds have already started preparations. They can now also make concrete choices with the social partners that suit their participants. In this way we can all make a success of this transition to a future-proof pension system.”

The new system is expected to enter into force on 1 January 2023.

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