IPE Netherlands Briefing: First three funds get go-ahead for DC switch

All three remaining ‘early birds’ have now received permission from pension regulator DNB to move defined benefit (DB) accruals to a new defined contribution (DC) arrangement on 1 January 2025.

Pensioenfonds Loodsen, the professional pension fund for Dutch shipping pilots, was the first scheme to get the stamp of approval in early November.

It was followed last week by the two remaining pension funds that were still in the running for a DC transition on 1 January 2025: the pension fund for disabled workers (PWRI), and the staff scheme of pension administrator APG.

The approval came “after an incredibly intensive process with almost daily contact between us and DNB,” said PWRI president Margreet Teunissen.

All three funds have a funding ratio of more than 120%, and therefore expect to be able to increase (expected) pensions for all members after the transition. By exactly how much will depend on the funding ratio on 31 December.

All three schemes have increased their interest rate hedge to reduce the impact of falling rates. The staff fund of APG is the only one of the three that has also reduced its equity exposure.

Separately, the Dutch pension fund for oil major BP said it is considering a buyout to a Dutch insurer for its Belgium-based DB accruals, leaving the future of its €1.6bn pension fund uncertain. BP transferred its Dutch pensions to a Belgian pension fund in 2016, which manages €1.6bn for more than 7,000 participants from six European countries.

The firm’s new DC arrangement under the Future Pension Act (WTP) will be placed within a Dutch pooled pension fund or another commercial provider, according to Paul van Tilborg, HR director at BP’s Dutch branch.

Items to note:

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Tjibbe Hoekstra

IPE Netherlands Correspondent