Rabobank Look At Potential Pension Reform Changes If PVV Forms A Government

Rabobank suggest that “if PVV is able to form a new government, it is likely to push for significant changes to pension reforms, although changes in pension regulation will not be a top priority like immigration.”

• “These changes will most likely impact existing benefits and therefore pension fund investments.”
• “If existing assets are not impacted, there is no need to adjust existing assets in a significant way.”
• “Any adjustments will take time and approval. Pension funds will only consider repositioning if possible changes in legislation are concrete, which would require a government to begin with.”
• “Also several pension funds have already positioned shorter on the curve. If they need to switch back to the longer-end of the curve we could see a re-flattening. The question is how big the mismatch potentially is.”
• “If existing assets are not impacted, they will be likely become (partly) closed funds, which typically still would need relatively high interest rate hedges.”
• “Most pension funds are planning to use some of the existing assets to compensate certain age groups for this transition. If existing assets are not impacted they would have to find new financing for this compensation.”