The Dutch financial regulator (DNB) is under no obligation to compensate SPVG for the losses the pension fund claims to have incurred after the watchdog forced it to divest most of its gold holdings. 

A corporate appeal college ruled that SPVG – the pension fund for glass manufacturer Vereenigde Glasfabrieken – had failed to make its case, according to Dutch news daily Het Financieele Dagblad (FD).

With the verdict, the Netherlands’s highest court for social and economic administrative law (CBb) overturned an earlier decision by a Rotterdam court that the regulator had to pay €4.8m in compensation.

The regulator appealed the decision, arguing that there had been “no damage” to the scheme, while SPVG did the same, claiming it lost nearly twice the amount awarded by the court.

The dispute has been ongoing since 2009, when SPVG increased its gold holdings to 13% as a form of “insurance” against a drop in the value of its assets.

The regulator, however, considered the allocation a concentration risk and ordered the scheme to cut its gold exposure to 3%.

SPVG argues it lost returns, as the price of gold rose steadily after the forced divestment in 2011.

It won several successive court cases, receiving a positive verdict even from the Netherlands’s highest court.

The level of compensation, however, remained to be decided.

The CBb court, according to the FD, has now ruled that SPVG failed to show it would have offloaded its gold holdings between 2011 and 2013, when prices reached their highest point over the period. 

Since 2013, the gold price has more or less fallen back to its 2011 level, when SPVG had to sell most of its holdings, the court said.

Meanwhile, SPVG decided to liquidate itself in 2014, joining the €21bn industry-wide pension fund PGB in October.

As a consequence, it was forced to cut pension rights by more than 4.3 percentage points, despite a €7.5m contribution from the employer together with an extra €4.2m as a “dowry” for joining PGB.

At the time, it also guaranteed payment of the amount it expected to receive from the regulator.

According to Erik Lutjens, a pensions expert at law firm DLA Piper who advised SPVG, all options for an appeal have now been exhausted.

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