The switch from a defined benefit (DB) to a defined contribution (DC) system in the Netherlands planned for 2026 will be delayed for “a maximum of one year”, social affairs minister Wouter Koolmees wrote in a letter to parliament.

The minister cited the overwhelming response to a consultation of the concept pension law, which will cement the change to a DC system, as the main reason for the delay.

“The fact we received 800 responses underlines the huge significance of this law for society,” said Koolmees, adding that all responses would be carefully considered.

“Given the complex topic and the need for further consultation with social partners, pension administrators and regulators this will take more time than we expected beforehand,” he said.

Koolmees had originally planned to send the new pension law to parliament in the first half of this year. But he now believes this schedule is too optimistic, and expects to send the bill to parliament only in the first half of next year.

The delay means the new pension system is now expected to come into force by 1 January 2023, one year later than originally planned.

Four-year transition period

As a consequence of the delay in the legislative process, the end of the transition period will also be pushed back by a year to 1 January 2027 as Koolmees wants to allow pension funds a period of four years to make the transition to the new system.

The minister stressed, however, that it remained possible for pension funds to make the transition at an earlier date. But the Pensioenfederatie, the Dutch association of pension funds, said it remained committed to finalising the transition to the new pension system by 1 January 2026 or earlier, as originally planned.

Finally, Koolmees said he would strive to implement parts of the new pension law, most importantly the transition regime which will relax requirements for pension funds to index pensions, already next year.

The minister said he remained committed to preventing “unnecessary pension cuts” in the run-up to the system switch. In practice, this would mean a one-year extension to the rule that pension funds that have a funding ratio of at least 90% will not have to cut pensions until the end of 2022.

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