André van Werven

Investment Manager, Food Industry Pension Fund (BPFL)

The PUO, the fiduciary and the custodian each speak their own language, but under the Wtp they are more dependent on each other than ever before.

How did the transition go?

‘Our transition had a long run-up. The first steps in the preparations were already taken in 2021. The starting point was that the transition had to take place in a robust and balanced manner. At an early stage, we brought in an external project manager to carry out the project management and the necessary actuarial calculations for the fund. Crucial in the run-up to the transition was the constructive cooperation with all stakeholders involved, both internally (the various fund committees) and externally (PUO, fiduciary, custodian, etc.).'

Why was January 2026 chosen for the transition?

‘At the time, Bpf Levensmiddelen wanted to switch to the new scheme as soon as possible. Initially, this was planned for January 2023, but because the legislative process had not yet been completed at that time, we postponed the transition. First to January 2024 and then again to January 2025. When it became clear at the end of 2024 that the transition would not be operationally feasible by 1 January 2025, we decided to make the transition on 1 January 2026.’

Were any adjustments to the portfolio necessary?

‘In the run-up to the transition, we carefully mapped out which adjustments needed to be made to the investment portfolio. The starting point was that the portfolio would align one-to-one with the risk appetite determined by the fund. It soon became clear that, based on the risk appetite, the exposure to corporate bonds would mean a significantly higher allocation to the return portfolio. At the same time, the existing interest rate sensitivity hedge had to be reduced to a large extent, particularly for longer maturities.

What are the most important points of attention now that the transition is complete?

‘First and foremost, of course, the focus is on ensuring that all operational processes related to pension management run smoothly. It is very important that all these primary processes run smoothly in the coming months. This also includes the smooth running of the asset management chain based on the SIVI flows. In contrast to the past, there will be a dynamic relationship between the matching and return portfolios, and therefore also more interaction between the various parties in the asset management chain.

What is the most important lesson for parties that are yet to make the transition?

‘Start involving all the implementing organisations involved in the fund in good time. Agree on the new working method together and communicate any issues you encounter. The PUO, the fiduciary and the custodian each speak their own language, but under the Wtp they are more dependent on each other than ever before. Therefore, coordinate mutual expectations in good time and make agreements at an early stage about what the new asset management chain will look like. It is also important to think at an early stage about when the transition of the portfolio should take place. For example, we have opted to reduce the interest rate sensitivity hedge before the transfer date. In order to continue to control the risk of an interest rate fall at the overall level, we have included euro swaptions in the portfolio, which means that the total risk to be hedged against an interest rate fall has not changed.’

Bas van Ooijen

Head of Investment Management, Pensioenfonds Horeca & Catering

The biggest adjustments were needed in the investments that contribute to managing interest rate risk, where we opted for a slightly different distribution across investment categories.

How did the transition go?

‘The transition to the new pension scheme was an intensive process, of which the ‘asset transition’ was only one part. The starting point for that asset transition was the establishment of an age-dependent investment policy that matches the risk appetite of the participants. A transition investment policy was then drawn up to make a controlled transition from the old investment mix to the intended investment mix. It was a long period of careful preparation. After all, the actual liquidity on financial markets around the time of the transition was uncertain. We were able to shape the asset transition in favourable market conditions with good liquidity. This meant that the asset transition went well for us.

Why was January 2026 chosen as the date for the transition?

‘The transition date was ultimately the result of consultations between social partners, the fund board and the implementing body. Once again, the asset transition was only one part of the process. Obviously, the financial situation has an impact on the transition. We were able to make the switch from an excellent financial starting position: a coverage ratio of 155%. A very good moment for the transition to the new scheme.’

Were any adjustments to the portfolio necessary?

‘Yes, definitely. The investment mix in the new pension scheme has a slightly different composition. The biggest adjustments were needed in the investments that contribute to managing interest rate risk. We opted for a slightly different distribution across investment categories. In addition, as a result of the age-dependent allocation of guaranteed returns and the chosen allocation rules, a lower degree of interest rate hedging is required.

To what extent will the portfolio change in the new situation?

‘We were able to implement most of the changes around the time of the transition. Changes in the less liquid investment categories will be further developed in the coming period. For example, under the new pension scheme, we are investing a little more in Dutch mortgages. This is a change that will take a little longer to implement. We do not foresee any major changes at this time.’

What are the most important points of attention now that the transition is complete?

‘Actually, the most important point of attention is the implementation of the new scheme. There is more interaction between pension administration, investment administration and asset management. We pursue an age-dependent investment policy in which the returns are allocated to our participants’ personal pension assets via allocation rules. This exchange of data between the various departments has, of course, been well prepared. After the transition, the time has come to actually do it. We are also preparing the transition communication to all participants, in which we will show them in the second quarter what the transition has actually meant for them.

What is the most important lesson for parties that are yet to make the transition?

‘Start your preparations in good time. When working out the details, keep an eye on different scenarios and discuss changes and new working methods thoroughly with all parties involved. Ensure you have a recognisable and sufficiently detailed roadmap and good cooperation with short lines of communication between all disciplines involved in the transition.’

Marit Kosmeijer

Director of Investments and Actuarial Services, Sprenkels

The pension funds that were transferred on 1 January 2026 did so under significantly different economic conditions than at the beginning of 2025.

How did the transition go for the funds you were involved with?

‘We saw a smooth transition across Sprenkels. Interest rate hedges were quickly phased out where necessary, and any protection structures expired on the transfer date. The feared effects on the interest rate markets due to a wave of swap sales did not materialise at the turn of the year: high hedging ratios led to indexations and higher transfer capital (and therefore more demand for hedging). There was pre- and post-sorting, and due to the rise in interest rates during the year, many speculators have already closed their positions.’

Why did funds choose January 2026 to make the transition?

‘The funds that chose 2026 (or were rolled over from 2025) generally wanted to start as soon as possible. This choice was often made several years ago, frequently based on the desire of social partners and pension funds to start the new scheme for their participants as soon as possible. The reason why January is often the chosen month (and not another month) is simply a matter of habit: 31 December is the financial year-end, contracts often expire on 31 December, and the administration and audit are calibrated to this date.

Were adjustments to the portfolios necessary?

‘Yes. Interest rate hedging went down and returns went up. In terms of interest rate hedging, partial pre-sorting had often already taken place. The decision to pre-sort and the extent to which this was done depended on the financial situation of the fund and the interest rate hedging required after the transfer.’

To what extent will portfolios change in the new situation?

‘For funds that have not yet adjusted the composition of their portfolios (i.e. those that are only increasing the return with the same composition), I think most will first be busy with the new regulations. Once that has settled down, there will be room to reconsider the investment portfolio. For funds with significantly higher return portfolios, the transition may be a reason to look at new (illiquid) categories. However, the implementation of this must be in line with the risk preference of the participants.’

What are the most important points to consider after the transition?

‘Performance monitoring is different in the new system: there is no longer a coverage ratio. This means that funds have to reassess when they are ‘performing well’ as a pension fund. Rebalancing will be different, monitoring will change, and the allocation of monthly returns will be immediately visible to different participant groups. Especially if it is a volatile year, small differences in management or monitoring can lead to large differences between pension funds. This requires, even more than before, clear and explainable policies and good communication. It is important that funds get a grip on their own performance in the new system. ’

What is the most important lesson for parties that are yet to make the transition?

‘Prepare for as many realistic scenarios as possible. The pension funds that entered the new system on 1 January 2026 did so under significantly different economic conditions than at the beginning of 2025, with higher interest rates and equity returns. Decisions regarding balance and investment policy sometimes had to be made quickly and new scenarios had to be explored. Identifying shifts in economic conditions in good time ensures that decisions do not have to be made again at the last minute. The situation on 1 January 2027 may be significantly different from today, which means that a smooth transition is not guaranteed again.’

Paul van Gent

Board member, BpfBOUW

The most important lesson is to continue to monitor frequently in the run-up to the transition date which portfolio composition and interest rate hedging should be targeted after the transition.

How did the transition go?

‘Successfully. It was a very intensive and complex process involving many stakeholders. The most important of these were the social partners and our own fund bodies (VO and RvT), our administrator APG and the supervisory authorities DNB and AFM. Preparations for the transition started as early as 2021, i.e. before the Wtp was passed by the Senate on 30 May 2023. A new scheme was needed and the transition had to be designed. This was primarily a process between the fund and social partners and involved a great deal of exchange. At our administrator APG, the emphasis was on data quality and preparing the new processes and systems. For example, a connection had to be established between the pension administration and asset management. In the old system, these administrations were separate from each other because there was no direct link between returns and individual entitlements.

Why was January 2026 chosen as the date for the transition?

‘The most important factor was that the fund and social partners had a lot of confidence in the new system and wanted to reap its benefits as soon as possible. Those benefits mainly lie in the much smaller buffers, which means that returns reach our participants much sooner. The earliest possible date on which we could make the transition was 1 January 2026. We went for that and we achieved it.’

Were any adjustments to the portfolio necessary?

‘Limited adjustments to the portfolio were necessary to bring it into line with the strategic investment policy under the new SPR. These primarily involved adjustments to the allocations to liquid asset classes. These adjustments took place without any problems at the beginning of January. The necessary adjustments were not so much due to conscious choices to adjust allocations, but were mainly prompted by the fact that the distribution between matching and return is dynamic under the SPR. Secondly, there were adjustments to the allocations to less liquid asset classes. These have been started, but will be implemented gradually over a longer period of time. Finally, there was the increase in interest rate hedging. This was necessary because under the Wtp, interest rate hedging is dynamic, depending on the development of pension assets. The increase in interest rate hedging was implemented in stages and has now been completed.

What are the most important points of attention now that the transition is complete?

‘With regard to the investment portfolios, this involves monitoring the extent to which the standard allocations for matching & return and the target for interest rate hedging vary and what adjustments (in terms of frequency and scope) are needed. A policy has been formulated on how to deal with deviations in the actual portfolio. This policy is being tested in practice.’

What is the most important lesson for parties that are yet to make the transition?

‘The most important lesson is to continue to monitor frequently in the run-up to the transition date which portfolio composition and interest rate hedging should be targeted after the transition. Because both the distribution between matching and return and the interest rate hedge are dynamic under the SPR, these are not fixed targets. By having a clear picture of what needs to be managed, an assessment can be made as to whether this can be achieved immediately after the transition, or whether it will take longer. In the latter case, consideration may be given to initiating certain adjustments before the transfer date in order to limit the deviations from the strategic investment policy – which reflects the risk appetite – both in terms of scope and duration after the transfer.’