Adapting to new government mandates in the pension sector
At a glance:
New regulations are forcing pension funds in the Netherlands to change the way they allocate participant assets
IG&H has developed a market research service to help Dutch pension funds address these new regulations
The new service enables data-driven risk appetite assessment and asset allocation, and empowers participants to better understand the impact of risk.
As of January 1st 2027, the Dutch government has mandated pension funds conduct surveys of their fund participants to find out how much risk each participant is willing to take with their pension investments. All Dutch pension funds must now provide proof that their participants have been surveyed, and that investments have been allocated to reflect survey findings.
Visualizing risk/reward with predictive data modeling
To help providers address these new regulations, IG&H offers a research service for the pension sector that employs the “Pensionmeter” risk assessment tool, which IG&H developed in conjunction with the Netherland’s largest insurer. The tool employs a predictive algorithm and intuitive interface that allow survey participants to immediately visualize potential pension outcomes based on asset allocation for their chosen level of risk.
For asset managers, it provides a clear indication of direction for investment policies, using outcomes based on realistic calculations and fund-specific parameters.
The Dutch Pension Fund for Public Transportation (Rail & OV)
Starting in 2013, a large pension fund in the Netherlands, the Dutch Rail & OV Pension Fund, conducted risk appetite research among its participants using what are known as “lottery” questions. But this method made it impossible for fund managers to understand exactly how much risk each participant was willing to take and what mix of securities would provide the desired outcome.
In 2021, Rail & OV subscribed to the IG&H risk appetite market research service. The management team is now able to more accurately assess risk appetite among participants (at both an individual and group level) and make data-driven decisions about how to tailor investment portfolios based on these assessments. They can also print reports that show the direct correlation between participant choices and asset allocations.