Dutch Pension Shift Avoided a ‘Cliff Effect,’ Central Bank Says

The overhaul of the €1.6 trillion ($1.9 trillion) Dutch pension system and its huge shift in investment allocations is proceeding smoothly without causing substantial volatility in financial markets, according to the country’s central bank.

The change by a number of funds at the start of the year was expected to spark a sharp reaction across bond and swaps markets as funds sold long-dated government debt and increased their exposure to riskier assets like stocks. Traders had made big bets to capitalize on the transition, though it appears to be much more calm than anticipated so far.