The Dutch Authority for the Financial Markets has published a report and accompanying message warning that pension participants risk receiving no compensation or less compensation under transition compensation arrangements if they make certain choices or experience life events such as changing jobs or taking on caring responsibilities. It calls for clearer and earlier communication so participants understand how the compensation scheme works and when they qualify, to avoid predictable disappointment and potentially significant financial setbacks. The AFM highlights that both pension funds and social partners have roles to play. Employers are expected to inform workers about how compensation may be affected in specific situations such as (un)paid leave, voluntary continuation, seasonal work and changing employment patterns, with employee representatives also expected to monitor this and raise awareness. While compensation is common among funds moving to the new pension arrangement and is aimed at active participants who face a future disadvantage from the shift in contribution methodology, eligibility and allocation methods differ across funds; social partners determine whether and how compensation is granted, and the pension fund then assesses whether it is adequate and fits a balanced transition. The AFM also stresses transparency where exact amounts are not yet known before the transition moment, including clarity on who will or will not receive compensation and the drivers (for example funding ratio, age or status), and expects participants to be able to understand how their final personal compensation amount was calculated after the transition.

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