The average funding ratio of Dutch pension funds increased by 13 percentage points in 2025, starting at 116 per cent and ending the 12 months at 129 per cent, according to Aon Netherlands.

Aon said pension funds benefited from a combination of good investment returns and higher interest rates.

Despite good investment performance, 2025 was characterised by US import duties and geopolitical tensions, which caused “great uncertainty in the financial markets”, but Aon noted that stock markets recovered quickly after a sharp fall in April.

On the progress of the Dutch pension reform, Aon said the year was “completely dominated” by the Future Pensions Act (Wtp), with deadlines adjusted and entry dates postponed.

Aon Netherlands director wealth, Frank Driessen, said the pension transition is “demanding a lot from pension administrators and funds”.

“We are pleased that there has been clarity about the deadlines, so that directors do not feel that they are formally behind the facts while in practice they are doing everything possible to ensure that the transition proceeds carefully,” he noted.

In 2025, it was confirmed that implementation plans must be submitted one year before the entry date, instead of on a fixed date.

Aon now predicts that the biggest peak of the transition will shift to 2027. It cited Visma Idella's decision to pause undertaking transitions at the end of 2025 as an example that the capacity of pension administration organisations is limited.

Therefore, Aon warned that pension funds must balance the requirements of the regulator with limited administrative capacity.

As part of its preparation for the new system, Aon has analysed the returns of typical lifecycle portfolios for participants at varying ages. Its analysis found that participants up to the age of 60 with a fixed lifecycle achieved a positive return in 2025.

However, older participants achieved lower returns, Aon said, because their investment risk has been reduced, swapping out equities for bonds, which yielded lower returns due to increased interest rates.

For participants who opted for continued investment, the return from the age of 55 was higher than for participants with a fixed benefit. This, Aon said, is because the risk is reduced less in the final years until retirement.

Driessen, said: "It can be seen that the costs of an annuity fell faster compared to the returns achieved. Participants in a DC plan can therefore purchase a higher pension compared to a year earlier."

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