NETHERLANDS - The Dutch pension sector is becoming increasingly worried about the effectiveness of pensions communication when it comes to explaining new pension contracts to their participants.

"Communication remains the keyword as well as the bottleneck," said Peter Gortzak, vice-chairman of the largest union confederation FNV, during a congress about topical pension issues.

Gortzak suggested communicating the status and any changes to pension contracts could become complicated "because of the many varied and legitimate interests of the participants".

The Frijns and Goudswaard committees, set up to advise the Dutch government on on pensions policy, recently recommended there should be changes in  pension arrangements, in order to make the pension system future-proof.

Among those changes it was suggested that pension funds should, for example, scale down their ambitions, explain risks to their participants and introduce more conditional elements in their pension contract.

But such a move has worried pension provider who have to communicate individuals' pensions position.

"Because pension communication is already complicated, we must really keep our message simple," stressed Armin Becker, director of the pension fund Arcadis.

Bert van de Belt, director of the €33bn metal scheme PMT, criticised the "complicated message" drawn up by communications regulator AFM - which pension funds must use in their latest communications on indexation - and described the indexation label as "ridiculous".

In the opinion of Pieter Omtzigt, MP for the Christian Democrat Party (CDA), new pension contracts should be standardised for communication reasons.

During the congress, Jos Dirks, director of the €12bn Rabobank pension fund, also suggested pension fund governance could be improved by creating a board of professionals, which is in turn supervised by a powerful board of trustees and made up of stakeholders.

Dirks further stressed the need for improvements to pension schemes' internal supervision, "since the board, as the subject of supervision, also appoints the visitation committee at present", and argued pension funds should be given more leeway to develop tailor-made governance.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

Topics