In this opinion piece, we aim to emphasise two significant developments concerning the Dutch pension reform. Firstly, we will address some actuarial aspects, and secondly, we will examine certain legal considerations.

Actuarial aspects

Collective pension transitions are typically assessed under one valuation regime and implemented under another. When market conditions shift materially between those moments, cohort-level outcomes may differ from those originally projected.

In the Dutch case, transition plans were largely assessed around 31 December 2023 under the prevailing market-consistent term structure and funding position. These parameters also formed the basis for the formal assessment of balanced and proportionate outcomes in the transition documentation. Implementation followed under a materially different yield-curve configuration. The shift was not merely parallel; both the level and shape of the curve changed, particularly at the long end.

Duration and yield-curve effects

The principal transmission channel is liability duration. Younger participants hold long-dated cash flows and are therefore more sensitive to movements in long- and mid-curve segments. Near-retirement and retired cohorts are more exposed to shorter maturities. When the term structure changes shape rather than moving uniformly, these groups are affected asymmetrically.

Comparing the transition-plan valuation (year-end 2023) with the execution-date valuation (year-end 2025) illustrates this mechanism. Cohort-level actuarial values show largely monotonic shifts: early- and mid-career participants experience relative declines, while near-retirement and retired cohorts remain broadly stable or slightly positive. This pattern aligns closely with differences in liability duration rather than discretionary allocation choices.

Although long-term yields increased materially between the two dates, the maturity segment most relevant for pricing immediate retirement income remained broadly stable. Higher long-end rates therefore did not automatically translate into more favourable annuity pricing, nor did they mechanically offset prior regime-driven shifts in actuarial value under DC-type payout structures. Moreover, where funding ratios are supported by high ex ante hedge levels, their sensitivity to long-end rate increases is structurally reduced, limiting automatic funding improvements from higher yields.

Implications for proportionality and governance

Limited proportional reallocations of surplus — such as redistributing fractions of the coverage ratio — operate only at the margin. The dominant driver remains the interaction between liability duration and the prevailing yield-curve regime at implementation. Where execution occurs under materially altered market conditions, the original proportionality assessment may not fully reflect realised cohort outcomes.

The broader implication extends beyond this specific reform. Collective defined contribution (CDC) and other risk-sharing arrangements are structurally sensitive to regime timing. When fairness and proportionality assessments are anchored in one valuation regime but implemented in another, questions arise regarding transparency, predictability and the robustness of the underlying governance framework.

Legal aspects

The ongoing transformation of the Dutch pension system, particularly through the Act on Future Pensions (Wtp), represents a pivotal moment in the country’s approach to retirement security. However, the proposed conversion of accumulated rights from the old defined benefit (DB) system to a new defined contribution (DC) framework raises significant legal and ethical concerns that cannot be overlooked. As the Dutch government attempts to modernise its pension system, it must ensure that this transition does not infringe upon the rights and expectations of current and future beneficiaries.

One of the most troubling aspects of the conversion is the lack of individual consent required from employees. Traditionally, any modifications to pension agreements necessitate the agreement of the parties involved. However, the Wtp allows for this conversion to proceed without the explicit consent of individual pension holders. This unilateral approach undermines the principle of legal certainty.

Moreover, the retroactive nature of the conversion further complicates the situation. Retroactive legislation is generally frowned upon in democratic societies because it disrupts established rights and legal relationships. The forced conversion effectively nullifies previously de iure guaranteed benefits, replacing them with uncertain future payouts tied to market performance.

We emphasise the necessity for additional legal safeguards to protect pension beneficiaries during this transition. Without these protections, the conversion could set a dangerous precedent for governmental encroachments on fundamental rights. It is crucial that the Dutch government acknowledges the potential liabilities it faces under EU law if the conversion process is deemed unlawful. The risk of legal action looms large, not only for the state but also for the pension funds that may be held accountable for damages incurred as a result of this flawed process.

Concluding remarks

In conclusion, while the intent behind the Wtp may be to modernise the Dutch pension system, the execution of the conversion process raises profound concerns regarding actuarial aspects and legal rights, individual consent, and the fundamental principles of fairness and equity. It is imperative that the Dutch government reassesses its approach to ensure that pension participants retain the option to either convert their rights or maintain them under the old system.

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