Dutch pension funds that opt for the so-called flexible arrangement in the new pension system will be allowed to have buffers, according to a revised draft version of the new pension law that’s yet to be discussed in parliament.

Under the original version of the law, only pension funds opting for the so-called “solidary pension arrangement” were allowed to retain buffers. This prompted a demand from several company pension funds that prefer the more individual “flexible pension arrangement” to also be given the option of a buffer.

According to sources familiar with the matter, the latest version of the concept law said that all pension funds can now have buffers. The law is expected to be sent to parliament at the start of 2022.

In the new defined cotnribution (DC)-based pension system, there are two possible contracts types: the so-called solidary arrangement, which is similar to the current system in the sense that there are no individual pension claims, and the flexible arrangement which has individual pension pots.

Pension funds opting for the former contract type will have a mandatory buffer of up to 15% of assets, while according to the latter pension funds have a voluntary option to add a buffer. However, this option was not available for company pension schemes.

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