Many stakeholders are involved in the design of the new Dutch pension system. The pension agreement is converted into a new act: Wet Toekomst Pensioenen (WTP). But which parties have a vote in this transition? What are the various interests of these parties, and how do they relate to each other?
This development involves the government, pension funds, pension administrators, and social partners (employer and employee organizations). The government is currently finalizing the WTP together with the social partners. Pension funds will have time to implement the new pension rules until the 1st of January 2027. However, the first funds under APG should enter the new system as of 2025. The roles of the main parties are set out below:
The Dutch Government
The government is involved in the new system in many ways. Most importantly, as a legislator. The Cabinet consented to the new pension agreement with the other parties, consisting of new pension regulations regarding the second pillar in our pension system. Under this pillar, people accrue pension through work, which they will receive on top of their state pension (AOW). In many sectors, such as in construction work and the public sector, sector funds exist under which all companies within that sector are required to build up pension. Other companies sometimes offer their own pension fund, in the form of a company pension fund. However, many people work at companies that do not have a pension plan for staff or do not automatically build up pension because they are self-employed. The government's intention is to decrease the number of people who work but do not accrue a pension by almost half a million in the coming five years.
The new WTP and the transition to the new system are comprehensive and complex. Many opposition members in parliament indicate they need more time and information to agree on the act. Nonetheless, the expectation is that the law will be passed, as the intent was established in the coalition agreement. In the Senate, where the current coalition does not have a majority, support will be needed from some of these opposition parties. Sufficient support is expected, even though here again more clarity remains to be given to win their vote.
Another important note is that the government often takes ad hoc decisions, such as postponing the new act, which can strongly impact pension funds, pension service providers, and social partners. The latter parties have already prepared for the transition to the new system and would like to make the long-awaited step. This is also of importance for the participants and retirees.
Social partners
Social partners represent pension participants and employers. On the central level, social partners have agreed with the Cabinet on the new pension agreement. Examples of the parties that represent Dutch employers are VNO-NCW and MKB-Nederland. Employees are represented by trade unions such as FNV and CNV. The social partners decide together on the content of the new pension scheme. They focus on whether all the pensions move along per the new plan and whether participants get compensation if they must make sacrifices compared to the current pension scheme.
To implement the new pension scheme, employer organizations and trade unions must come to an agreement. Until then, the social partners and pension administrators will have time to adapt pension schemes to the new legislation. The social partners are responsible for the primary choices, while the pension fund board is responsible for the details of these choices and their implementation.
Pension funds
The transition to a new pension system is a challenge for pension funds. Pension funds must execute what social partners agree on together. In theory, they can decline, but in practice, this is complicated. Hence, the complexity of social partners’ decisions, and the time they take to do so, directly impact the pension funds. This proves a real risk for pension funds (and service providers) not to have sufficient time to implement the necessary changes.
Changes in law and regulations can impact pension funds heavily. This uncertainty surrounding the new system forces pension funds to consider, calculate, and prepare for various scenarios. The transition is associated with many risks for the funds. Most importantly, collective pension assets must be distributed evenly among the fund participants. This requires high data quality. Data must be correct, complete, and reproducible. Moreover, the pension funds and the participants will decide what risk they are willing to accept in the new system. The uncertainties carry the risk that preparatory work needs to be redone when the decisions have been finalized.
Pension service providers
Pension service providers, such as APG, handle the administration, asset management, and communication with participants and employers for pension fund clients. They play a crucial role in the transition to the new system. The WTP emphasizes a more personal and transparent pension for the participants. According to experts, clear communication and explainable steps for pension members in the transition to the new system are highly relevant. Here, participants must understand how features which become more visible, such as risk sharing, work. To implement the new system properly, pension service providers must explain the new rules to their participants in understandable language and emphasize the feasibility and importance of the new regulations.