The introduction of the Future Pensions Act (Wet toekomst pensioenen, or Wtp) heralds a fundamental transformation of the Dutch pension system. For pension funds, this entails not only a new framework for pension accrual but also a significant shift in responsibilities concerning financial management. Consequently, liquidity management is moving to the forefront of pension board agendas.
Previously viewed as an operational task, liquidity management under the Wtp is now a strategic pillar within overall risk management. Simultaneously, the growing use of derivatives and central clearing obligations is elevating the importance of effective collateral management. While traditionally used to ensure smooth settlement cycles, securities finance has evolved into a key tool for sourcing liquidity efficiently. Pension funds are increasingly utilising securities finance to meet this growing demand for liquidity. In this context, repurchase agreements (repos) present a valuable instrument for sourcing liquidity temporarily, ensuring long-term investment strategies remain intact while effectively managing risk exposures.
In a recent roundtable discussing changes in the Dutch pension sector and how securities finance products naturally fit in offering solutions, Maurits Daarnhouwer, pension fund regulation expert, discussed the topic with securities finance front-office and client-facing experts, Beta Steiner, Olivier Zemb, and Joanna Ksenzova.
