New Dutch pension system is first step in a wider shake up

Wouter Pijl, Head of Digital and Performance and Rutger Meulman, Consultant at Delta Capita, discuss the four strategic changes that will shake up the Dutch pension sector and its value chains.The Du


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Wouter Pijl, Head of Digital and Performance and Rutger Meulman, Consultant at Delta Capita, discuss the four strategic changes that will shake up the Dutch pension sector and its value chains.

The Dutch pension system faces its most complex and impactful change of the last few decades. The final legislation is not ready yet, and the transition period of five to six years is long. But the new system will cause lots of stress in preparation and hurdles to the migration of assets and customers. Many pension funds and administrators don’t have the skills or the budget to execute such a complex transformation.

Research by the Dutch Central Bank showed 20% of the country’s pension funds expect to liquidate, and the rest face huge challenges . The planned system will create a new competitive field in the pension sector that leaves many considering whether to ‘migrate or liquidate’.

Strategic changes in the new system

€1700 billion will have to be migrated to the new pension system. The biggest mistake pension funds and administrators can make is to manage this as ‘just a big conversion of schemes and assets’. However, it is much more. The implementation involves four strategic changes that will significantly impact pension funds, administrators, and the wider sector.

New Dutch pension system: the four strategic changes


The shift from defined benefits to defined contributions will accelerate the transition to individualised pension services. After the migration, pension beneficiaries will ask more critical questions about the services of pension funds and administrators, including:

  • Have my pension rights been migrated correctly?
  • What are the administrator’s costs, as they will cut into my pension benefits?
  • What is the asset manager’s performance, as this also affects my benefits?
  • Can I influence the investment portfolio and how?

This individualisation requires pension administrators and assets managers to fundamentally change their processes, calculations and communications with pensions funds and their customers.


The new system will require asset managers and administrators to turbo charge their moves towards full digitisation of service delivery. However, legacy IT systems are still at the core of many administrators' systems.
The complex migration will require a new generation of technology and data solutions that enable a more individualised approach to functionality and service; and reduce operating costs significantly.

Compliance pressure

Pressure from regulators will increase rapidly in the next five years, due to the complexity of the migration and the shift to individualised service delivery.
We expect regulation to become stricter, similar to that for banks and insurance companies. It will question strategic choices and viability, and require strict controls for day-to-day business operations and increased reporting capabilities.

Increased competition

The barriers for switching asset managers were already low, but those for pension administrators were higher. However, the migration to the new system will reduce the latter significantly.
Many legacy systems and historic arrangements will disappear, and digitisation will lead to standardisation and cost transparency.

Scheme members will demand flexibility to switch to the cheapest administrator and the best performing asset manager, similar to the way they do with insurance products, for example. They will also want a flexible, self-service pension statement alongside their bank accounts and investment statements. Pension funds will start to switch administrators over the next five years in preparation for this new world.

Migrate or liquidate: that is the question

The Dutch Central Bank survey showed that many pension funds and administrators face complex strategic questions, including:

  • Do we have the skills to migrate to the new pension system and survive in a new, more competitive market?
  • The new system will require more involvement from employees and managers – do they have the skills and experience they need?
  • Should we migrate ourselves or use a reliable administrator and or asset manager?
  • Should we standardise and simplify our pension schemes and contracts?
  • When should we start the migration?
  • How should we communicate the changes with scheme members?

These are difficult choices, and each decision will have a major impact. Preparing and executing a smooth migration over the coming years will be a challenge. Most administrators and asset managers will probably succeed, but some will fail.

Once the migration is complete, the next phase in the shake-up of the pension sector will start, which is moving towards an era of commoditisation and customer experience. Banks and insurance companies are working hard to remain competitive as they meet that challenge. The pension sector will also have to step up as they enter that arena.

Delta Capita is dedicated to reinventing financial services value chains to make them more efficient, effective and secure.

Head of Digital & Performance Wouter Pijl and consultant Rutger Meulman focus on reinventing and improving the performance of financial services firms.