September 14, 2020
After 10 long years of debate and refinement, The Netherlands’ new pension reform has been agreed upon. The new sweeping measures make up the most significant pension reform change the country has ever seen, and it will all come into effect on January 1st, 2026. But don’t let the six-year lead time lull you into a false sense of security – to comply with these new measures, you’ll need every day you can get.
So, just how big of a job will it be to meet these reforms’ requirements?
The complexity of this undertaking cannot be overstated. Both the investment side and the (pension) administration side will be greatly affected by these reforms. Now, the current environment is perfectly set up to thrive in the stable world of pension boards – it has been an asset and strength to operate on a consistent, stable, and level rate – but this style of operation will simply not do during this transition. There are key decision-making processes to go through from now until 2026, and boards will likely need to change how they operate to meet this change successfully and oversee the consequences of their choices while doing so. They will most likely need to start running at a higher frequency – perhaps meeting more often and managing a transition agenda next to BAU – which may seem simple, yet lots of these members have other, full-time obligations making this possibly very difficult.
There will also be an educational element to tackle as well, as social partners, trade unions – and all other partnerships and participants – many of whom are required to take an active role will need to understand precisely what is expected from them and how this change will affect their lives and work moving forward. This, of course, means that not only will this reform be a massive technical challenge but a communications challenge as well.
Indeed the margin for error due to the complexity and vastness of this reform is substantial, and the more time you give yourself to make a solid plan of attack, the better. This reform will impact virtually every facet of your business, and of course, you’ll have other programs running simultaneously. When taking on such an immense challenge, it’s vital to have a bird’s eye view of a well-thought-out and structured plan with detailed timetables and milestones. It all starts with an overview of when to take which decision, including interdependencies between decisions. At the back of these decisions, a transition plan can be set up. It’s essential to know each interdependency to ensure you’re taking advantage of the most optimal solutions and minimizing being reactionary and surprised. From managing your people-power – and ensuring you have that capacity at all – to sure-up your IT processes and creating a working road map of how you’re going to get from A to B in the next six years – ACE can help. We can help establish a working plan, tailored to your specific needs and decisions you have to make, with a transparent chain of decision outcomes to keep you in control of this process and not run to put out fires or continuously just trying to catch up.
If you’re interested in learning more about how we can help you meet this challenge head-on and execute it with efficiency and minimal friction, please reach out. Take advantage of this six-year lead time – you’re really going to need every moment of it!
As always, thanks for reading,
TEAM ACEBack to Meeting the Pension Reform Challenge