The Dutch Pensions Federation has said it expects a “long period of uncertainty” in the wake of the UK’s decision to leave the EU, pending negotiations on new treaties between the two.

Bram van Els, its spokesman, also lamented that the Netherlands would “lose an ally on pension matters in the EU”.

He cited shared interests as a consequence of the fact most British pensions are also capital-funded, and that both countries often worked closely together in European pensions talks.

In the Federation’s opinion, however, it is too early to say whether the British will also leave lobbying organisation PensionsEurope, according to Van Els.

“This would depend much on the treaties that are to be concluded,” he said. 

“Norway – as a non-EU member, for example – is compliant with EU pensions legislation.”

Harmen Geers, spokesman for the €417bn asset manager APG, sought to put the effects of a Brexit into perspective by pointing at pension funds’ long-term horizons.

“Quite recently, there was significant market volatility because of developments in China,” he said. “This seems, however, to have largely disappeared.”

Geers noted that, last week, markets were up by more than the initial drop in the FTSE 100 this morning, and that the value of UK government bonds had risen following falling yields.

APG has a €3.9bn stake in UK government paper, he said.

Geers also observed that pension funds that had hedged the downward risk of the UK pound would achieve a positive result.

He declined, however, to provide details of APG’s hedging policy.

In an official statement, APG – also speaking on behalf of the €359bn civil service scheme ABP – added that the outcome of the referendum had “increased uncertainty and instability at a moment that the European economy was recovering”.

It predicted this would have a “negative affect for pension funds over the long term”.

Both Mercer and Aon Hewitt said Brexit would have a significant impact on Dutch pensions.

Average funding of Dutch schemes is likely to fall by 3 percentage points to 94% as a direct result of the referendum, they predicted.

In early afternoon Friday (24 June), Aon Hewitt noted a 0.15-percentage-point drop in the 30-year swap rate relative to its level of 1.07% on Thursday.

Dennis van Ek, actuary at Mercer, predicted pension funds with insufficient funding or interest hedges would have to cut pension rights, or would be unable to grant indexation next year.

He added that this would affect “millions of participants”.

Frank Driessen, chief commercial officer at Retirement & Financial Management, said the combined liabilities of Dutch pension funds had risen by more than €30bn as a result of falling interest rates.

He noted, however, that, despite equity losses in Europe and the US of 5% and 3%, respectively, the net loss for pension funds would be limited to no more than “a couple of billions”.

“Losses in the US have largely been cancelled out by a stronger dollar, while falling interest rates had a positive effect on the value of government bonds,” he said.

Meanwhile, Geert Wilders, of the anti-Europe Freedom Party (PVV), has called for a Dutch referendum on EU membership.

Such a referendum is already expected to become a main issue in the Netherlands during political campaigning for the national elections in March.

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