NETHERLANDS – The Dutch pensions industry has welcomed the new government's plan to introduce the financial transaction tax (FTT) with an exemption for pensions funds.

The trading sector, however, has reacted furiously against the so-called Tobin tax, as well as plans to cap bonuses in the financial sector at 20%.

Gert Kloosterboer, spokesman for the Pensions Federation, said his organisation was pleased, "as an exemption for pension schemes has always been our goal".

Harmen Geers, spokesman for APG, the €314bn asset manager for civil service scheme ABP, agreed, adding: "For a long time, we have emphasised that pension funds should not fall victim to measures meant to curb commercial players and risk seekers."

Geers also pointed out that APG needed to trade derivatives to hedge against risks and protect pension assets.

"We are not pursuing maximum profits, but stable returns for our clients," he said.

MN Services, the €80bn asset manager for the metal schemes PMT and PME, also described the government's condition for the introduction of the FTT as "good news".

However, its spokesman Bram van Els said he agreed with Geers that much would depend on the details of the government's FTT plans.

Meanwhile, VEB, the association of equity owners, said it strongly opposed the tax.

Its director Jan Maarten Slager described the FTT as a "very bad instrument" that would "come at huge costs for society".

He argued that the levy would limit liquidity in the markets and increase borrowing costs for companies.

Robin Fransman, deputy director of Holland Financial Centre (HFC), the lobbying organisation for the financial sector, said the government should exempt not only pension funds but also pension insurers and market makers.

"Otherwise," he said, "market makers will move to countries that won't introduce the FTT, such as the UK, Ireland and Luxembourg."

Fransman also criticised the announced bonus cap, an "overkill" that would lead to activities being moved abroad or to increased salaries to circumvent the limit.

"Much has already been done to weed out excesses in the policy of variable pay," he said.

The new government is led by the liberal party VVD and labour party PvdA.

Until recently, the outgoing Dutch minority government of VVD and the Christian Democrats (CDA) opposed the FTT.

Finance minister Jan Kees de Jager once suggested that the transaction tax would have a "devastating effect" on the trade in derivatives, equity and bonds.

Topics