Dutch pension funds that transitioned to the new pension system in 2025 have increased by an average of 14 per cent, according to the Dutch government.

Providing an update on the reform, the government stated that the increase was made possible due to the more targeted financial buffers in the new system.

Under the new pension system, funds are required to hold smaller and more targeted financial buffers. With less capital tied up in collective reserves for risk and solvency, a larger share of assets can be allocated to pension benefits, supporting higher payouts.

The Dutch Minister of Social Affairs and Employment, Mariëlle Paul, said: "Under the new system, Dutch citizens will receive pensions that increase more easily, are more transparent and are better suited to employees who no longer stay with the same employer for 40 years.

Paul said the transition is “well underway” as more than half of Dutch people with a pension scheme have now transferred to the new system.

“The sector is working hard to ensure that the remaining pensions are also carefully transferred over the next two years. We will therefore remain in close contact with the pension funds, insurers and regulators,” she said.

Under the new system, the government noted that pension funds expect the likelihood of annual increases to be much greater than the possibility of reductions. This is because under the new system, a larger proportion of the contributions paid and the returns achieved will be available for pension payments

Currently, 30 pension funds have transitioned to the new system, with six more expected to follow suit within the next six months.

At the end of this year, another 15 funds should have made the switch, while 61 pension funds plan to transition in 2027, after which the last 25 funds will switch on 1 January 2028.

Paul said there is currently no reason to postpone the transition deadline, which remains set at 1 January 2028. This is in line with the advice of the Government Commissioner for Pension Transition, Professor, Dr, Fieke van der Lecq.

However, the government stated that concerns remain about the pension schemes of small employers, which still need to be transferred. The Minister stressed that it is very important for small employers to take action.

The Ministry of Social Affairs and Employment is working with employers' organisations to take measures to inform and support employers.

Regarding costs, the total administrative costs for managing 10.7 million pensions rose by €220m to €1.4bn in 2024, representing an increase of 17.7 per cent. The government noted that these are partly one-off costs due to preparations for the transition, and costs are expected to fall once the transition is complete.

In addition, the government noted that the reform is being used as an opportunity to invest in IT systems. This was previously noted in a report by BDO Accountants & Advisors in December.

Despite rising costs, the report stated that the transition is an opportunity for PUOs and funds to modernise.

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