The Dutch Pension Federation has urged the government to clarify further details around the transitional financial assessment framework (FTK), warning that savers could face future reductions in their pension.

The federation explained that whilst most pension funds have not had to make any cuts this year, this is likely due to Covid-19 easements, which temporarily allowed for a coverage ratio of 90 per cent.

However, it emphasised that these measures will no longer apply as of next year, with a new FTK taking its place during the transition period, until the new pension contract comes into effect in 2026.

The federation also noted that although the current bill under discussion has stated that pension funds must grow to a coverage ratio of 95 per cent by 2026, it only describes "in broad terms" what the financial assessment framework will look like in the transition period.

As such, the Pensions Federation has called to continue discussions with the government and parties that concluded the Pension Agreement, in order to agree on the interpretation of these rules as soon as possible.

It also argued that the “basic principle” should be that any measures in the period up to 2026 will be assessed on the basis of the system of the new pension contract, as will apply from 2026.

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