IPE Netherlands Briefing: ‘Early birds’ prepare for DC transition

With only a little over two months to go until the first pension funds make the transition to a new defined contribution (DC) arrangement on 1 January 2025, these so-called ‘early birds’ are busy with their final preparations.

On the investment front, they have all been upping their interest rate hedges to protect their funding ratios against falling interest rates. However, only one of the remaining three frontrunners has also reduced its equity risk.

Indeed, the number of such ‘early bird’ schemes has been thinning fast, from five at the start of this month to only three at the time of writing this: the professional pension fund for shipping pilots (Loodsen), the pension fund for disabled workers (PWRI) and the staff pension fund of pension administrator APG.

At the start of this month, there were four remaining frontrunners which held an emergency meeting with regulator DNB, the ministry of Social Affairs and the Dutch pension federation to clear up differences about the interpretation of some clauses in the pension law after a phone call from Pensioenfederatie president Ger Jaarsma to the director of pension supervision at DNB, Gita Salden.

“There is above-average unrest among the frontrunners. It seems we do not understand each other,” was his urgent message.

While the parties reportedly came closer together during the meeting, DNB has since ordered two of the three pension funds in question (Loodsen and the APG staff fund) to adjust their implementation plans.

Meanwhile, the grocers’ scheme Levensmiddelen postponed its transition after it had received “a lot of good, but also less useful questions” from the regulator, that it could not answer in time to make the transition by 1 January, according to its president Erwin Bosman.

In other news, GP fund Huisartsen announced its full divestment from fossil fuels following a sustained campaign by doctors to do so. The pension fund had already been reducing its exposure since 2021, but retained some €100m in fossil fuel stocks. It will now sell these by the end of next year.

In other ESG news, healthcare scheme PFZW announced it had sold all its listed investments in Israel and several other Middle Eastern countries last spring. Commenting on the decision, the fund stressed that the investments were sold “after weighing risk versus return and to protect the pension capital of our members”.

The fund also said it sold its investments in Saudi Arabia, Bahrain and the UAE as a precautionary measure, “in view of increased tensions and the growing threat of conflict expansion in the region”.

Items to note:

• The IPE Conference & Awards 2024 will take place 2-3 December 2024 at the Cubex Centre and Žofín Palace in Prague. Sign up now!

Tjibbe Hoekstra

IPE Netherlands Correspondent