Pensioenfonds Loodsen, the professional pension fund for Dutch shipping pilots, has been the first pension fund to get the go-ahead from pension regulator De Nederlandsche Bank (DNB) to move to a new defined contribution (DC) arrangement by 1 January 2025.
The fund, with €1bn in assets under management and 1,335 members, is now making its final operational preparations for the DC switch, according to Rajesh Grobbe, the director of the pension fund.
Only an extreme movement in the funding ratio could still throw a spanner in the works. If the funding ratio drops below 110%, or rises above 153% before the end of the year, new consultations with the Dutch association for pension funds and the funds pensioners’ association would be needed. The chances of such a big move are slim. The fund currently has a funding ratio of 125% and has fully hedged its interest rate risk in the run-up to the pension transition.
The fund is now in the process of arranging communications about the changes to its members, Grobbe said.
Members will receive an initial forecast of their pensions in the new arrangement at the end of November.
Based on the current funding ratio, the fund expects to raise benefits for pensioners. It will will become clear later this month by exactly how much this will be.
Amended implementation plan
The fund is the first to win the coveted approval from regulator DNB to “sail into” the new pension system, as the DB/DC conversion is called in the Netherlands.
This was preceded by an “intensive process,” said Grobbe, during which the fund had to amend its implementation plan twice because DNB required the fund to better explain why its planned transition would be “balanced” for all age cohorts in the fund.
Two other funds aiming to transition to DC on 1 January 2025, the Dutch pension fund for workers with disabilities (PWRI) and the staff pension fund of pension asset manager APG, are still waiting for DNB approval.
Several other funds that originally also planned to move on that date had to postpone their transition for various reasons, including IT issues, but also because the regulator was perceived as demanding.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra
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