Dutch healthcare, construction and metal pension funds plan 0.8% rise

Three of the Netherlands’ largest pension funds will raise payments by about 0.8% next year, a modest increase that the funds say will not keep pace with high inflation. The rise takes effect on 1 January 2027.

The funds are PFZW, which serves more than three million people in healthcare and social services; PMT, covering 1.3 million in metal and technology; and bpfBOUW, with about 750,000 members in construction. They moved to the Netherlands’ new pension system at the start of this year, when payouts rose by 12%, 8% and 21%, respectively.

The funds said investment and interest-rate results were positive in the first nine months of this year. But they are retaining about two-thirds of those results to cushion future fluctuations, leaving around 0.8% available for increases.

PFZW director John Landman said the fund’s planned rise of 0.75% was “modest, especially given current inflation”. He said PFZW uses a third of its smoothing reserve each year to adjust pension income and keeps the rest for later years. As this is the first year of the arrangement, he said, the fund cannot yet benefit from three full years of smoothing.

The new system gives participants individual pension pots. Distributing funds’ reserves helped finance this year’s large increases. Smaller mandatory buffers can allow pensions to rise sooner, but they can also fall more quickly in difficult periods.

Higher interest rates have reduced the buffers the funds need to hold, which helps payouts, but have also produced negative returns on some investments, including bonds. Landman said he expects PFZW to keep pace with inflation over the longer term, though not every year.

Other major funds are due to move to the new system on 1 January. Metal-electrical engineering fund PME expects to raise pensions by 12.6%; civil service fund ABP has not yet given an estimate.