Active Asset Management By Dutch Pension Funds: A Regulatory Assessment

From passive implementation to active risk-taking

The transition under the Wtp and rules on socially responsible investment are prompting Dutch pension funds to reconsider their reliance on passive strategies. That is because one of the core objectives of the new Dutch pension system is to provide participants with ‘an earlier prospect of a pension that better preserves purchasing power’. Under the previous system, the regulatory framework placed significant emphasis on funding-ratio management and nominal certainty. The Wtp shifts the focus towards long-term real pension outcomes, while giving pension funds greater scope to align investment risk with the risk preferences and return objectives of different participant cohorts.