The journey to a new pension contract starts today

Why a new pension system?

The assumptions on which the old system is based (participants who are single-earners and work full-time for one boss for a lifetime, funding ratios calculated with a risk-free interest rate) are outdated. And as there are more pensioners and fewer people in work, the old system becomes less and less sustainable. Since 2008, there has therefore been talk of a new system with more customisation, flexibility and room for indexation. The Future Pensions Act provides the legal basis for this.

What makes the pension transition so complex?

The sheer size of the project, with so many participants and power, is unprecedented and challenging. The old system has become increasingly complicated over the years due to many adjustments and the new system is fundamentally different. Instead of a collective pension pot, there will be a personal pot for each participant. Instead of variable contributions and fixed pension entitlements, the premiums will be fixed and the entitlements will be variable. So a whole new IT infrastructure has to be set up. An additional problem is that the data of older participants and pensioners in particular is not uniform and complete. And then there is the social and political sensitivity of the pension issue, which puts a magnifying glass - and often also a brake - on decision-making.

How do you achieve the required speed without taking too many risks?

Collaboration is in this everything. The pension transition requires various forms of cooperation between the organisations involved:

• The social partners and pension funds must work together to shape the new pension scheme and the entry decree.
  
• Pension administrators and administration organisations are jointly responsible for setting up the chosen scheme.
  
• Pension funds together and separately can work on quality improvement and standardisation in the field of data. Moreover, they can work together on the customer journey, which is broadly the same for all eight million participants. In order to ensure public confidence in the new system, good and consistent information is essential. A start must be made on this today.
  

For each of these forms of collaboration, the white paper provides insight into the challenges and suggestions on how parties can achieve the goals faster and more efficiently, without running unnecessary risks. This includes effective consultation, a good delineation of tasks, (partially) agile working, project-based budgeting, making sharp choices, good communication and building in sufficient time for setbacks.

Is a four-year transition process feasible?

Yes, but then social partners, pension fund boards and executive organisations will have to speed up and - if they have not yet started - set a firm course from tomorrow. Alone and together. Using all available strategic, process-based and executive expertise, within and outside the Netherlands. With this white paper, Deloitte wants to contribute to a successful and timely transition. With points of attention, possible pitfalls and how to avoid them and advice for the pension sector on how to meet the deadline. On time, carefully and unscathed, first and foremost for participants.