NETHERLANDS - There's an old Chinese curse that says 'may you live in interesting times'. It might have been coined for the Dutch pensions industry.
"All times are interesting, especially for Dutch pension funds," says Jeroen Steenvoorden, director of pension fund for self-employed medical specialists SPMS. "There is so much going on."

"Dutch pension funds have been through a very turbulent period," says Frans Prins, director of the Corporate Pension Funds Association (OPF). "Now the focus is on the implementation of new policy initiatives and legislation. The main issues are a move from final-pay arrangements to average-pay schemes, the implementation of actuarially fair early retirement schemes, the introduction of the fair value measurement of pension liabilities instead of a fixed discount rate of 4%, and in some cases a change from a defined benefits scheme to a so-called collective defined contribution scheme."

Earlier this year it was expected that a new pensions law, pulling together various amendments to previous legislation dating back to 1952 and containing a new financial assessment framework (FTK), would be implemented from the beginning of next year. But the government that bulldozed the changes through the initial consultation stages with the industry and into the lower house of parliament, collapsed in June and a minority caretaker administration called an early general election for November.

And this has made the timetable uncertain. "The lower house is due to pass the law this month," says Prins. "But the question is whether the Senate will be able to reach a decision before the election. It's up to the Senate to decide whether it thinks the law is important enough to consider before election day."
However, whether the pensions law is passed before the end of the year or not the expectation is that the FTK will go into effect on 1 January 2007. "Everybody thinks that the FTK will be implemented, through a decree if not through legislation," says Renske Biezevel, policy adviser at the association of industry-wide pension funds (VB).

"The FTK is going to come anyway because the regulator, the DNB, is strongly in favour of it a very powerful actor in this area," says Erik Hulshof, director of finance and information at Mn Services. "It's going to happen, although there might be a slight delay."
"In light of the imminence of the introduction of the FTK one would have expected that pension funds would have moved towards fixed interest last year," says Biezevel. "But instead one saw a rise in equities of approximately 1%. This might be attributed to the rise in value of equities, but for some pension funds it was an active choice based on ALM studies. In addition because of last year's low interest rates pension funds had been delaying the switch towards more matching of assets and liabilities."


Netherlands Top 10 pension funds by assets (€m):

1. ABP………………………..……186902.9
2. PGGM……………………………69001.0
3. PMT……………………………….28186.5
4. Bouwnijverheid…........................20015.3
5. PME……………………………...19288.3
6. Shell…………………………......16200.3
7. Philips…………………........…..14000.2
8. Doctors PFS……..........……….11600.2
9. Spoorweg……………......……..11000.2
10. KLM…………………….……..10299.3


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