The Dutch pension risk transfer (PRT) market is expected to see "multiple waves" of interest as the country transitions to the new pension system following the introduction of the Future Pensions Act (WtP), Legal & General (L&G) has said. 

The trajectory and growth of the newly emerged Dutch PRT market is not yet completely clear, as L&G's estimates suggested that its ultimate size could vary considerably, from as small as €20bn to as large as €70bn. ​

However, L&G argued that, with €1.4trn in Netherlands-based pensions assets, it "only takes a small percentage of pension plans to choose an insurance solution for a viable market to be created".

The firm's Global PRT Monitor report suggested that the Netherlands PRT market has "strong growth potential" as a result of the long-awaited pension reforms, which will see a shift from a defined benefit (DB)-style model to a model with defined contribution (DC) characteristics, for both past and future benefits.

If pension funds want to continue to offer guaranteed benefits for some of their members under the new system, they will typically only be possible via an insurance solution, such as a buy-in or buyout.

However, L&G's report suggested that pension plans in the Netherlands are now often well-funded and many would be able to afford these guarantees, with "multiple waves" of interest in the Dutch PRT market expected as a result.

The first wave of transactions, involving smaller plans opting for buyouts rather than transitioning to the new system, is expected to conclude by the end of 2026.

But L&G said that it also expects further activity to involve plans transitioning accrued DB benefits into the new DC pension system under the flexible option, ahead of the final deadline for the transfer to the new system in 2028.

And more activity could be seen even after the transition period, as L&G said that it expects there still to be a PRT market for those plans that choose to run off their DB pension plan as their transition plan.  

​The Netherlands was not the only European PRT market set for growth, as L&G found that whilst the Irish PRT market remains small, "green shots of growth are visible".

"Transaction volumes each year are low and focused on retiree-only populations," the report stated.

"Despite this, green shoots of growth are visible – where solutions can be found for deferred members and Irish inflation-linked benefits, making the market’s progression is possible. "

Despite a slower start to the year in the UK, L&G argued that total market volumes for 2025 are also expected to be consistent with industry projections of £40bn-50bn for the third year in a row.

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