A Dutch Lesson on Redefining Retirement Solutions
May 21, 2025
The Netherlands is leading a historic shift from Defined Benefit (DB) to Defined Contribution (DC) pension schemes, revamping Europe’s largest pension system. We explore the emerging responses from Dutch CIOs, as we witness this transformation.
Defined contribution (DC) schemes have seen sustained growth, while defined benefit (DB) plans have been in steady decline for years - a trend expected to persist1 . Over the next 2.5 years, the largest pension savings system in the EU will undergo a significant shift from DB to DC.
The transition in the Netherlands brings familiar challenges faced by DC systems globally, including delivering inflation-protected income to participants, addressing the differing administrative complexities of DC versus DB, evaluating the role of illiquid alternative investments within DC structures, and mitigating tail risks, both investment-related and longevity-driven, for pension savers.
Cerulli Associates estimated that Europe’s defined contribution market will record an average growth rate of 6% over the next five years, nearly twice the rate for the rest of the pension industry in the same period2. With nearly two trillion euros ($2.3 trillion) in accrued benefits3, the transition has significant implications for asset classes. We explore the emerging responses from Dutch CIOs to each of these pressing issues as we witness the transformation of the country’s pension landscape in real time.
1. October 2023, Pensions & Investments, Europe's defined contribution market poised for a boom, Accessed March 2025
2. March 2022, Cerulli Associates, Europe’s Defined Contribution Market Is Set to Keep Growing, Accessed March 2025
3. European Central Bank, The structural impact of the shift from defined benefits to defined contributions, Accessed April 2025
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