‘Small and simple first’: these three pension funds already made the switch to the new system

It is calm, around the transition to the new pension system. In Politiek The Hague, the planning of NSC is rumbling to arrange participation in the transition to the new system. Minister Van Hijum (Social Affairs, also NSC) he called it last week ‘not desired’; The House of Representatives will debate on Wednesday. The new system was also challenged in the courtroom. At the end of last year, the 84-year-old retired Havenloods Richard Gorter asked in a high -profile More time to form an opinion on that. He didn’t get that time from the judge.

You would almost forget that the transition is in full swing in the meantime. At a meeting in the Amsterdam office of pension administrator APG, there are purely smiling faces at the end of February at funds and implementers who made the transition. There is A ‘finish photo’ Made, complete with black and white checkered finish flag. And a ‘real retired’ has been invited. Ellen de Boer, former employee of APG, is ‘very happy’ with the new benefit of her personnel pension fund. She has not noticed anything of the transition, she says satisfied.

In January, PPF APG, the Fund for the Loods and PWRI (social workplaces) was the first three pension funds to switch to the new system. Three more will follow until the summer, and until 2028 all funds must have made the switch. All three funds that are already over to the new system could increase pension benefits ranging from 4 to 13 percent.

Initially, the group of funds that wanted to transfer at the beginning of this year was much larger, but gradually ‘front runners’ fell off because of the complexity of the entire operation. How did the three funds in the new system manage to switch so quickly? And how did they go?

In the end we of course also had a bit of luck with the economy

Assumptions

If PPF APG (more than 8,000 participants) has done one thing well, according to chairman Tinka den Arend: start in time. Her fund did that as early as 2021, well before the new Pension Act was introduced in July 2023. The APG staff pension fund started with provisional assumptions based on the bill. « If details changed, we always had to go back to employers and employees for consultation. That helped to build mutual trust, » says Den Arend. « You don’t want choices based on wrong arguments. »

The pension sector stands for financial sampling operation. In three years, 1,600 billion euros in pension assets of more than 10 million pension beneficiaries must be transferred. Employees and pensioners receive their additional pension that they have built up together with their employer, no longer as a promised future benefit from one large pension pot. In the new system, everyone has their own pension pot, which becomes more dependent on the investment results in the financial markets.

Employers and employees have laid down their choices in a transition plan. In it they agree on how that large, joint pension pot is distributed over the new individual pots: who gets what?

Whatever choice they make, according to the new law, they must argue that interests between generations ‘balanced’ have been weighed. With those agreements, pension funds and implementers will start working. Calculations for scenarios from economically rosy to very bad times are included in the plans.

You have to take your participants with you. You can have a nice story, but if they are not satisfied, it will not help you yet

Another question that the funds should consider: should they keep a reserve for setbacks in the new system? And if so, how much money should they put in that?

In the new system, funds have to maintain less large buffers than in the old system. « We have discussed a lot about the amount of that reserve, » says Rajesh Grobbe, director of the Administrative Office of Professional Pension Fund (more than 1,400 participants). « People who are still working will benefit from a well -filled reserve, the pensioners with a slightly less well -filled. And we also want to be a robust fund in the future. »

In the search for that balance, ‘sheds’ organized numerous meetings, online and physical, in which it explained to the working and retired sheds and answered questions about the new system. « Saving support », « good listening » and sometimes putting out « putting out fires » are very important in this, Grobbe learned. « You have to take your participants with you. You can have a nice story, but if they are not satisfied, it will not help you yet. »

Relief

With Oud-Havenloods Richard Gorter, sheds had at least one dissatisfied participant. He wanted more time to study the consequences of the relocation of his pension. In summary proceedings, he demanded a postponement of the transition. The judge ruled However, a few days before that transition that the consequences of deferment for the pension fund would outweigh the short time that Gorter had to prepare for the switch.

The statement was a big relief for Grobbe and his colleagues, who had everything ready to switch from 1 January. If the judge had in favor of Gorter, the old pension scheme would have had to be extended. Grobbe: « That had yielded a huge stacking of work with major costs, for us but also for our performer and accountants. For example, we should have re -programmed the old scheme, and the communication that had already been sent had to restart. »

PPF APG chairman Tinka den Arend did not experience any stressful moments, but it was often exciting enough: « An important question was: can you come out where you want to come out and offer everyone an elevation? » This is only possible if the pension fund is good enough shortly before the transition. In the end, that was the case with APG’s Personnel Fund, which could increase the pensions of all participants.

To make that possible, the fund decided to invest less risky in the run -up to the transition. As a result, setbacks have less impact, but if the financial markets are doing well, the fund can also benefit less from it. « In the end we of course also had a bit of luck with the economy, » acknowledges Den Arend.

Share scenarios

The choices made must be extensively responsible and shared with the participants. PWRI, the Fund for Employees who fall under the social work provision (190,000 participants), is not enthusiastic about that obligation to share numerous scenarios and calculations on the expected pension with its participants. According to the fund, that would not contribute to trust in the new system. The Fund’s administrative office says that people with a distance to the labor market « really have a different information need than participants with a scientific education ». With ‘understandable color and image use’ and assistance to employers, who have an important role in communication, the fund tried to meet the obligation as well as possible.

In addition to the distribution and communication issues, the transition to the new system also comes a major IT operation. Other IT systems are needed to administer the new pensions. Pension providers convert a ‘old style’ benefit into a ‘personal pension capital’. Before that, APG, which also manages PWRI’s pensions, went into the sea with the Danish fintech company Festina Finance. « They have a huge amount of IT and pension knowledge. Our experts were able to work with each other endlessly down to the deepest technical details, » says Wim Koeleman, who coordinates the transition to the new system on behalf of APG.

The company already had a basic system that was very usable, because Denmark had already moved to a pension system that resembles the Dutch. Specific Dutch elements were added. « Think of the distribution of retirement if you are going to divorce, or how pensions are linked with benefits from the UWV, » says Koeleman.

When a pension fund switches, it cannot fully determine yourself. In addition to its own Personnel Fund and PWRI, the implementer APG also manages the administration for six other funds, including the ABP official pension fund (more than three million participants). That planning was « a very complex puzzle. » If too many funds wanted to switch at the same time, that would put too much pressure on the organization – from APG, but also from the Nederlandsche Bank supervisor.

Koeleman: « Funds soon wanted to take advantage of the benefits of the new system. » They could hand out buffers and increase the benefits, as the first three funds have made. Among other things, to be able to cope with possible teething problems more easily, in consultation with the funds, « small and simple first, and later large and complex. »

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