The four Dutch pension funds still lined up to transition to a defined contribution (DC) arrangement on 1 January 2025 held an emergency meeting with regulator De Nederlandsche Bank (DNB) this week.
The funds could not agree with the regulator about the interpretation of certain legislative demands pension funds need to fulfil in order to make the transition to the new DC pension system.
Two weeks ago, Ger Jaarsma, president of Pensioenfederatie, called up Gita Salden, the new director of pension supervision at financial regulator DNB, with a clear message: “There is above-average unrest among the frontrunners. It seems we do not understand each other.”
With frontrunners, Jaarsma referred to the four pension funds that are scheduled to be the first to make the transition to DC as of next year. These include Loodsen, the fund for shipping pilots; the fund for the grocery sector Levensmiddelen; PWRI, the scheme for disabled workers; and the staff fund of pension provider APG.
Last week, the fifth fund that was supposed to make the transition on 1 January 2025 (Kring Holland Casino) postponed its move by four months.
The disagreements were concentrated on issues such as how to substantiate that the existing pension pot would be redistributed to members in a balanced way, and other technical issues.
“At one point, we got stuck. The experts from the funds and those from DNB were talking, but they couldn’t come to an agreement,” said Jaarsma.
Salden, who joined DNB’s board on 1 June, acknowledged pension funds tend to complain about the level of detail DNB is requiring from them.
“We are opting for intensive guidance of the frontrunners to make it easier for the other funds afterwards,” Salden said explaining the regulator’s approach.
In order to foster mutual understanding between the regulator and the pension funds, an emergency meeting was called last Tuesday, with representatives of DNB, the ministry of SZW, the Pension Federation and the four remaining frontrunners attending.
Since there was no meeting space available at short notice in DNB’s premises in Amsterdam, the meeting was held in the Pension Federation’s office in The Hague instead.
During the meeting, the parties came “closer together”, according to Jaarsma, who acknowledged that DNB spends “a lot of effort” on the frontrunners. The disagreements between the pension funds and the regulator tend to involve details, but these also need to be resolved, he noted.
“The frontrunners have to submit their final documents one of these days. It should not be the case that DNB then says: ‘It looks good, except for one small thing’,” he added.
Fixation on dates
Although both parties emphasised that they share the same goal, it also became clear that the pension sector and DNB occasionally rub shoulders. For instance, Salden noted a “fixation on dates” in the sector.
“We may regret that a number of funds have moved their planned transition date, but from the point of view of due diligence, this is justified. It is no more than a date,” said Salden, referring to 1 January 2025.
But quite a crucial one, according to Jaarsma: “For the sector, it would be good if a number of funds made the transition to DC on 1 January.”
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