Dutch pension funds are scheduled to be sold 125 billion euros of government bonds

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Dutch pension funds are scheduled to pressure the European government bond markets later this year, starting to sell about 125 billion euros of bonds that have been long for a long time due to a major reform of the retirement sector.

Between 2025 and 2028, the 1.5 -Treen -Treen pension industry is transmitted in a system in which the final payments of retirees are guaranteed to a specific contribution framework, as employers are only related to the amount they set. This means that this means that keeping debt in the long term to support them in the long run and freedom of the most investing funds.

Although a handful has already turned, the Dutch funds that run approximately half of the total assets that need to be transferred are transferred in January next year, where managers are expected to prepare the governor in the period before. Strategists at the Dutch Bank Rabobank expect that 127 billion euros of sovereign debt will be sold in the long term over the course of the transition.

The sale is the latest example of a decrease in demand for long -term debt between pension funds that, along with record levels of sovereign borrowing, helped raise bond returns all over the world.

“The sales may come” very quickly at the end of the year … but pre -emptive deals may be punitive if there is more delay. “

PFZW, the second largest pension fund in the Netherlands with 259 billion euros of assets for health care workers, told the Financial Times that he was on the right path to move to the new system on January 1, 2026. ABP, the largest in the country, planned to move the following year.

The increasing revenues of bonds accumulate on policy makers, as Europe increases its borrowing to finance its defensive and energy ambitions, led by the spending plan of 1 euros “whatever it is.”

The debts of the euro area have been particularly hit. Germany’s return has increased for 30 years of less than zero during the street epidemic to more than 3 percent, near its highest levels since the eurozone debt crisis. The additional interest rate paid on the debts of France, which lasted 30 years, compared to its rewards for two years, from scratch two years ago to more than 2 percentage points.

Dutch pension funds, which are the largest in the euro area, used to swap interest rates and government bonds through various time horizons, up to more than 50 years or more, to suit the period that must be paid to the smallest.

But with the transfer of funds to a system in which they pay based on returns, they are scheduled to move towards more dangerous assets such as stocks and credit, which they expect to generate higher returns to its long -term members.

“There will be a shift far from 50, 40 and 30 years of bonds,” said Michelle Tukker, a European bank strategic expert at the Dutch Bank. “Now the question. … who will be the buyer?”

Some other traditional buyers have withdrawn. Japanese investors, historically, buy the cornerstone of sovereign debt in the euro area, Sell Their holdings at the end of last year at the fastest pace in a decade.

Rabobank estimates that before debt sales, Dutch pension funds own about 457 billion euros of government bonds, with the heavier sales – estimated at 69 billion euros – expected in German, French and Dutch debts.

About 19 percent of all government debts in the Netherlands owned by the Dutch pension funds, compared to the ownership of 8 per cent of German packages, according to Rabobank, with the highest ownership of bonds with a distant merit date.

Which leads to the transmission of pensions, the Dutch funds increase their use to hedge through bonds and bonds to protect the percentage of the benefits of their members from any shock in the interest rate or the stock market stumbled.

“It gives a difficult dynamic, as you are motivated to increase your interest rates on the date of the transition, and after that date you do the opposite trade as quickly as you can not want to be the last,” said Tokker.

The timing is still inaccurate. A handful of retirement funds has already delayed the date of the transfer, including PME, a 60 billion euros scheme for workers in the mineral and technology industry. Analysts said that hedge funds were profitable.

“What are the long prices that would be embarrassed and how much is the price already?

Additional reports by Ian Smith