Pension funds must provide more information about outsourcing and procedures for appointments in their annual report, the monitoring committee for the code for pension funds has indicated.

In its first evaluation of the application of the code, which came into force in 2014 after a joint effort by the Pension Federation and the Labour Foundation (StAr), the committee also suggested that schemes should give more clarity on subjects such as the suitability of board members and diversity of representation.

The committee has drawn its conclusions on the findings of research bureau Ecorys, which had checked 222 annual reports over 2013 for 34 of the 83 standards of the protocol.

The committee’s zero measurement focused on whether and how pension funds are dealing with the themes, it said.

The researchers noted that schemes have already applied a large number of the norms, including providing insight into costs, policy choices, risk management and board performance.

However, pension funds hardly gave information on agreements with providers, remuneration policy or arrangements for whisteblowers, they said. The same went for the regular evaluation of actuary and accountant.

Ecorys also found that the most annual reports were also not clear about the procedure for the appointment of trustees and members of the supervisory board, and lacked clarity about the role of the scheme’s board and other organs within the pension fund for appointments.

In the opinion of the monitoring committee, most pension funds were inadequate in indicating the current diversity of representation, or how they intended to improve any imbalance.

The researchers further noted that many pension funds failed to provide a clear definition of some standards, and also recommended including reports of, for example, their accountability organ and their compliance officer in their annual report.

The code is meant to improve governance, and has legal been underpinned by legislation since 1 July 2014.

The code has succeeded the principles for proper pension fund governance, which were formulated by the StAr in 2005.

For more on pensions in the Netherlands, see the upcoming March issue of IPE

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