What would a significant market downturn mean for Dutch pension funds?

The week ending 11 April saw exchanges violently whipsaw but ultimately the partial retreat from the Trump administration (except for continued harsh treatment on China) has helped markets to recover part of their recent losses. But the threat has not disappeared. The market volatility and continued policy uncertainty is also a reminder of potential vulnerabilities.

With many Dutch pension funds approaching their transition to the new system, how would they fare in a serious market downturn? How would that impact the transition?

Building on our previous work, we recently looked at what funds have done so far, where we see funds as still vulnerable, and what can they do. The punchline? Funds have hedged a lot of interest rate risk, but are still exposed to a downturn in equities. Some extra good news from last week’s moves? Managing that risk just got cheaper again.

We hope you enjoy our paper here. If you'd like to discuss how these risks could affect your specific fund, please get in touch.

For a longer look at the transition, the impact of market risks and how stress scenarios could affect individual age cohorts, please also see how our original November 2023 paper together with Northern Trust, which can be found here.

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Download the PDF publication following the link below:
Planning amidst uncertainty>>