As the Netherlands’ pension sector navigates its Wet toekomst pensioenen (Wtp) transition, a growing body of regulatory guidance and independent research suggests that the industry’s default approach to participant communication is producing dangerously skewed expectations.
Kidbrooke, the financial forecasting infrastructure firm, has outlined why simply showing participants optimistic projections is no longer fit for purpose — and what a better model looks like.
The problem begins with a number. Under the Dutch Uniforme Rekenmethodiek (URM), pension administrators run 10,000 stochastic economic scenarios, then distil the results into three figures for participant statements: a bad-weather outcome (5th percentile), an expected outcome (50th percentile), and a good-weather outcome (95th percentile). The issue, as Kidbrooke and the Dutch financial regulator AFM have both flagged, is that participants frequently anchor to the largest figure — the good-weather number — without understanding it reflects only the best 5% of all modelled futures.
The AFM’s Sector in Beeld Pensioenen 2025 highlighted the specific risk this creates for younger participants in premium DC schemes, where the spread between good- and bad-weather projections can be several times wider than in older DB arrangements. Without contextual explanation, that prominent top-line figure becomes the expectation — not the exception.
Kidbrooke’s analysis goes further than simply criticising which number is displayed. Even showing the median, which represents a 50% probability of at least achieving that income, fails to communicate the shape of downside risk. In retirement, that shape matters enormously. Unlike an accumulating investor, a retiree drawing down capital in a poor market faces sequence-of-returns risk that can permanently damage their income. The bad-weather scenario is not a footnote; it is the scenario participants most need to understand.
Research published by Netspar reinforces this point, finding that participants receiving the standard three-scenario navigation metaphor tend to treat the range as a formality rather than a probabilistic statement. The format was designed for a DB world; it was not built for one where individuals bear investment risk directly.
What Kidbrooke proposes is a fundamentally different approach: probability-based forecasting that presents the full distribution of outcomes rather than three isolated data points. In practical terms, this means participant portals where individuals can see their probability of meeting a target income — for example, a 72% chance of achieving at least €1,800 per month — and explore how adjusting contributions, investment profiles or retirement dates shifts that probability.
The regulatory direction supports this shift. In its October 2024 review of 62 pension funds, the AFM found that 37 had shortcomings in balanced communication, with negative outcomes consistently buried beneath positive ones. A July 2025 AFM bulletin specifically recommended that administrators address communication scenarios involving pension declines.
Kidbrooke’s forecasting infrastructure, KidbrookeONE, is built to support exactly this kind of participant-level probability analysis.
For deeper insights into the topic, read the full story here.
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