Has there been a breakthrough in the debate on pensions?

This article will tell you more about:

• the transition from the old pension system to the new one
• what ‘moving your pension’ really means
• the political discussions it has stirred up
• the possible outcomes
• the pros and cons

Since the new law came into effect, pension capital in the old system has been ‘moved’ into the new system. This affects people who have built up pensions under final-pay and average-salary schemes with pension providers (not with insurers). 

The idea behind the new system is to ensure that everyone remains covered as the pension landscape changes. As in the old system, employers in certain sectors are required to include all employees in a pension scheme. 

Transferring pension capital in each fund collectively has several advantages:

• The total pension capital (both accrued and yet to be accrued) is consolidated, reducing the administrative burden.
• Accrued pensions can probably be raised sooner thanks to more flexible rules in the new system.

Neither the old nor the new pension system provides full security of a guaranteed benefit.

The current pension system:

• Pension capital for all members is invested collectively.
• A promise is made about the amount of pension benefits paid out, so you know ahead of retirement how much you can expect to receive.
• However, making promises about the amount of pension benefits means the pension fund needs to maintain large buffers in order to shield members’ capital against financial setbacks as much as possible.

The new pension system:

• Everyone has their own ‘pension pot’.
• You don’t know how much your pension will be worth until payout, as this depends on the contributions you’ve made and the returns gained.

So, the differences between the old and the new pension systems are quite significant. And it’s not yet clear whether everyone gains by moving to the new system. What would staying in the old system mean for you?

Since the Dutch elections in 2023, reforms of the pension system have once again caused a stir. Critics are concerned that individual members have no legal right to object to their pension being moved to the new system. Some Dutch parties, such as NSC and BBB, argue in favour of the right to opt in or out. This would mean that a pension fund member would have to agree to their pension being moved. NSC, BBB and SP had previously called for a referendum among members. 

There is also debate about whether it is right to move members to the new system without their consent. Can social partners – representatives of pension fund members – decide without scrutiny from members? This could breach the European Convention on Human Rights, some experts say.

Both BBB and NSC have called for a referendum for members of each pension fund before they switch. But it is also worth remembering that there is no legal obligation to switch. If a certain group of members would be significantly worse off under the new pension system, the social partners can decide not to switch.

In practice, this would mean that one pension fund would apply two pension systems at the same time. Pension providers would then have to maintain the two systems side by side for decades to come. This would increase administrative costs and, as a result, decrease investment returns.

Pension funds that do switch can access the benefits of the new pension system, such as the lower buffer requirements. This means they can index pensions – and therefore raise them – sooner.

In spring 2025, NSC submitted a bill in favour of individual members’ right to object. This bill proposed that members themselves have a say in what happens to the pension they’ve built up: either move it to the new system, or keep it in the old one.

While the bill was supported by BBB and PVV, other external stakeholders had concerns about the bill’s negative effects and whether it was workable.
The bill was put to vote in the Dutch Lower House on 20 May and was opposed by a slim majority. As a result, the previously adopted new Pensions Act will in all likelihood be implemented as planned.

All pension funds must have submitted a transition plan to the Dutch central bank by 1 July 2025, setting out how they will move to the new system. By 1 January 2028, all pension plans will have to comply with the new rules. 

We’ll continue to keep a close eye on this topic.