The new Dutch pension system can’t be introduced until 2027 and then it will happen with ‘a big bang’, sources have told the Financieele Dagblad.

The negotiations on reforming the Dutch system started some 10 years ago and plan for the transformation should be agreed by the end of this year.

Now, sources told the paper, plans are on the table which would involve pension funds and other providers making the switch to the new system in one go.

The disadvantage is that the old regime would continue for several more years than originally envisaged, because the changeover was originally set for 2022.

But some funds and service providers have been warning that not everyone will be able to make the change so quickly because it will take a lot of time to prepare millions of pensions to meet the new rules.

The Dutch pension system is currently based on three pillars – the state pension AOW, compulsory corporate pension schemes – either sector-wide or company based – and individual or private pension schemes.

The reform talks agreed on several issues. Firstly, the state pension age will rise less quickly than originally planned, and there will be an early retirement option, aimed at people doing hard physical work.

Secondly, the reforms aim to spread the burden of paying for pensions more fairly across the generations. Corporate pensions will no longer be on based average (wage related) contributions but on everyone paying the same.

The FD says a decision on whether or not to go for a big bang approach will be taken in the coming weeks because employers, unions and ministers want to be in agreement about the headline process by the end of this month.