The Wtp also introduces a new guiding principle for pensions. “Security” is no longer the key pillar, but rather the focus is on “offering prospects for a pension with purchasing power”  as reflected in the Explanatory Memorandum, Wtp. Furthermore, according to the legislator, pensions are expected to become “more transparent” and “more personalised”. Hence, the Wtp requires pension funds to incorporate the risk preference survey (RPO) into their strategic investment policy.

This shift significantly influences the investment policy pursued by pension funds. After all, the (primary) aim of maintaining the purchasing power of pensions means that sufficient investment returns must be generated to enable indexation. At the same time, the pension fund must take the results of the RPO into account and provide sufficient justification for how it has used them in determining its strategic investment policy.

The introduction of the Wtp thus makes investment policy more visible and more open to challenge. We are therefore taking a general look at the prudent-person rule, the open standard for pension funds regarding investment policy.

From a defined-benefit scheme to a defined-contribution scheme

Defined-benefit scheme

As mentioned, in the ‘old’ pension system (i.e. the pension system prior to the entry into force of the Wtp, as it still applies to pension funds that have not yet transitioned), the certainty of pensions was paramount.

The defined-benefit scheme, as implemented by the majority of mandatory industry-wide and company pension funds, was defined in the old system as “pension agreement concerning a fixed pension benefit”. In practice, this meant a ‘right’ to a lifelong pension benefit that depended on salary and length of service (with a distinction being made between the final salary scheme and the average salary scheme). In other words: the promised pension benefit was in principle fixed, and pension funds structured their (financial) policy in such a way that this promise could be guaranteed with a certain degree of certainty.

That certainty was not absolute but concerned: “that with 97.5 per cent certainty, the pension fund will not, within a period of one year, have assets below the level of the technical provisions”, as stated in Section 132(2) of the Pensions Act (prior to the Wtp).

Defined-contribution scheme

Under the Wtp, pension schemes become defined-contribution schemes. The pension agreement then essentially relates to the contribution payments. The final pension outcome is no longer ‘guaranteed’, but depends more heavily on returns, interest rate trends, mortality tables and the way in which risks are allocated between groups of members.

The solidarity-based defined contribution scheme (‘solidaire premieregeling’), the type of scheme operated by most (industry-wide) pension funds that transfer to the new pension system, are characterised by the adoption of a single collective investment policy, whereby the financial returns achieved are then allocated/distributed individually on the basis of pre-determined allocation rules (by age cohort). In principle, under this system, pensions can fluctuate significantly with the economy, but risks (such as investment and longevity risks) are shared collectively, and a solidarity reserve is established to absorb major shocks.

This does not mean that members will be any less critical than we have seen in the current system. On the contrary: if the preservation of purchasing power is not achieved under the Wtp either, the blame may shift. The focus will no longer be on the employer or the old defined-benefit system, but rather on the pension fund’s investment policy.

Purchasing power retention remains a vulnerable point

Maintaining purchasing power continues to be uncertain, even under the new system. Indexation still depends on investment performances. The money released from the buffers under the Wtp has already been distributed at the point of transition and investment returns are also largely used to maintain pension outcomes (i.e. to prevent them from fluctuating too much).

Recent figures illustratr this challenge. Aegon Asset Management reported in April this year that an average pension fund operating under the solidarity-based defined contribution scheme achieved an average total return* of 1.2% in the first quarter of 2026.

*In the solidarity-based defined contribution scheme, the total return is divided into a guaranteed return and excess return. Members receive a certain percentage of each of these components added to their personal pension assets, with younger members receiving a higher proportion of excess return and older members having greater exposure to the guaranteed return.

This is insufficient to supprt indexation: due to declining interest rates (meaning a member needs more capital for the same pension benefit), a 1.3% protected return was found to be necessary to maintain pension levels. The excess return in the first quarter of 2026 therefore stood at -0.1%.

Consequently, the underlying tension remains: employees (but also the legislator) expect protection against loss of purchasing power (“offering prospects for a pension with purchasing power”), whilst pension funds are expected to invest within legal, prudential and social frameworks.

Claims regarding investment policy are not new

In recent years, several legal proceedings have already been brought in which members or associations have claimed compensation from pension funds due to missed indexations or disappointing pension results.

Examples include claims against pension fund ABP concerning its investment policy (see Limburg District Court, 13 July 2022, ECLI:NL:RBLIM:2022:10667), the Euronext case, which was initially brought against Euronext’s corporate pension fund, Pensioenfonds Mercurius Amsterdam (PMA) (see Amsterdam District Court 19 January 2018, ECLI:NL:RBAMS:2018:431), and the case against Stichting Pensioenfonds Notariaat (see The Hague District Court 19 November 2025, ECLI:NL:RBDHA:2025:21768).

The grounds for these cases differed, but the substance of the claims was similar: indexation had not taken place, and someone (the fund) must make good for this.

In the first two cases mentioned, compensation was claimed from the pension fund on the basis of the prudent-person rule. The pension fund was alleged not to have invested in accordance with that rule, resulting in insufficient returns to enable indexation to be implemented. The basis of the claim was that this made the fund liable to the member on the grounds of breach of contract or tort.

What does the prudent person rule entail?

The prudent person rule derives from Article 19(1) of the Pension Directive (Directive (EU) 2016/2341) and is enshrined in the Netherlands in Section 135 of the Pensions Act and further elaborated in the Pension Funds Financial Assessment Framework Decree (the FTK Decree), Sections 13 and 13a. In short, pension funds must invest carefully, expertly and in the interests of participants and pensioners.

This is an open standard, which pension funds initially interpret and assess themselves. This means that no single fixed investment mix is always right or wrong. The pension fund must be able to explain why the chosen policy is appropriate for:

  • The fund’s objective;
  • The characteristics of the member population;
  • The risk appetite per age cohort;
  • The risk preference survey*;
  • Scientific insights;
  • The interests of members and pensioners; and
  • The legal frameworks of the Pensions Act, the FTK and the European Pension Directive.

*Under the Wtp, Article 52b of the Pensions Act explicitly requires pension funds to determine a risk appetite for each age cohort and to pursue an investment policy appropriate to that risk appetite. According to DNB, which recently issued a ‘guidance note’ on strategic investment policy to ‘four out of five’ funds that had been placed under supervision, this is ‘a real difference between the new contract and the old contract’ (see DNB sends supervisory letter to 26 funds under supervision | Pensioen Pro).

Judges examine the substance of the policy

It is clear from the aforementioned case law that judges scrutinise the substance of pension funds’ investment policies as soon as a claim is made that the prudent-person rule has been breached. In the proceedings against PMA and ABP, the central question was whether the fund had invested prudently. The court explicitly assessed whether the pension fund’s investment policy “was such as to constitute an attributable failure to fulfil an obligation or unlawful conduct towards [the claimant]” (see Amsterdam District Court 19 January 2018, ECLI:NL:RBAMS:2018:431, legal ground 10).

In the ‘PMA case’, that full review did not result in the fund being held liable. The court held, first and foremost, that pension funds have the freedom to invest as they see fit within the framework of the Pensions Act and the FTK Decree. It is primarily for the pension fund to interpret the prudent-person rule, and for the supervisory authority to check whether that open-ended standard has been properly applied. The court did not consider it decisive that, in this case, DNB had not concluded that PMA had breached the prudent person rule and that the certifying actuary had more often than not declared that the prudent person rule had been complied with; however, it did regard these as important considerations in its assessment of whether PMA had invested prudently. PMA’s (investment) objective did, however, prove decisive. The court ruled that taking risks to achieve returns, given that the pension fund had committed to pursuing indexation (which, after all, must be financed from investment returns), was, in the present case, consistent with a prudent-person approach to the fund’s obligations. The investment policy pursued, despite being risky, was therefore not in breach of the prudent-person rule.

In the ABP case too, the court formed an independent opinion on the prudent-person rule as a benchmark for assessing breach of contract and/or tortious liability on the part of the fund, this time vis-à-vis a pensioner. The pensioner argued that ABP’s investment policy had failed to generate sufficient funds to enable indexation. The subdistrict court reached a different conclusion, basing its ruling on ABP’s arguments that (i) it had invested in a responsibly diversified manner, (ii) it had remained within the legal framework when determining its investment policy, (iii) it had in fact achieved good investment results in recent years, and (iv) the failure to index was primarily linked to the financial standards of the old system.

Pension funds must therefore apparently be able to substantiate the substance of their policy on the basis of the prudent-person standard if it is challenged.

How can pension funds comply with the prudent person rule?

Now that investment policy is coming under (greater) scrutiny with the introduction of the Wtp, it is becoming even more important for pension funds to carefully document, justify and keep their investment policy up to date. We believe that the following points, at the very least, are important in this regard.

1. Align the investment policy with the fund’s objective

Risks taken must stem from the pension fund’s objective and the scheme (pension ambition) envisaged by the social partners. If maintaining purchasing power is a key objective, this may allow scope for a return-driven policy. However, that choice must be properly substantiated.

2. Clearly define the risk appetite per cohort

The Wtp requires that the risk appetite be determined for each age cohort. This risk appetite must be based on participant characteristics, risk preference research and scientific insights. The strategic investment policy must be aligned with this. Deviations are permitted if this is in the interests of the groups concerned (members, former members, pensioners, employers – see Section 105(2) of the Pensions Act).

3. Document the management’s assessment

As the prudent person rule is an open standard, documentation is crucial. The fund must be able to demonstrate what information was taken into account, what interests were weighed up and why a particular investment mix or allocation system was chosen.

4. Take social developments into account

Pension funds operate not only within legal frameworks but also under societal pressure. ESG factors may form part of the investment policy, particularly where the fund chooses to do so. Even then, decisions must be justifiable and consistent with the fund’s objectives and members’ interests.

5. Prepared for retrospective scrutiny

Investment policy is often only called into question when results are disappointing. That is why it is important that pension funds are not only able to point to returns retrospectively, but can also demonstrate in advance that the process was conducted with due care.

Conclusion

The Wtp makes pensions more personalised and transparent, but also makes investment risks more visible. As a result, pension funds’ investment policies may increasingly become the subject of discussion and subject to legal claims.

The prudent-person rule remains the central framework for assessment. Pension funds are not required to prevent every instance of underperformance, but, as evidenced by the way judges apply the prudent-person rule, they must be able to demonstrate that their investment policy has been established with due care, clear reasoning and transparency, and in the best interests of members. In the new system, that justification is no longer implicit, it must be actively demonstrated. 

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