NETHERLANDS - Pensions funds in a position of underfunding will get a reprieve of three years instead of one year to recover, a majority within the parliament has indicated.
The three large political parties labour party PvdA, the Christian Democrats CDA and the liberal party VVD have tabled an amendment to the Pensions Bill, during discussions with Social Affairs' minister Aart Jan de Geus in the parliamentary select committee. They want to avoid that an economic downturn will be enhanced by a recovery process for sufficient coverage.
However, the regulator De Nederlandsche Bank should retain the option of setting a one-year term for vulnerable pension funds, they added.
The three parties also want an independent body to advise on the parameters for the new financial assessment framework, or FTK. The parameters can have a big impact on the indexation and contributions, and shouldn't be influenced by political considerations, they indicated.
Minister De Geus showed his support for a national on-line pensions register - another amendment by the three parties - as long as it is carried out by the pensions sector. "The government is only in charge of the state pension AOW," he said. (See separate story)
The discussions within the parliamentary committee haven't been conclusive yet on the issues of a shared supervision by De Nederlandsche Bank and the Authority Financial Markets, and on whether pension funds and insurers have to pay benefits if an employer hasn't paid his contributions.
No conclusions have been reached either on an ‘indexation label' - meant to show participants how inflation-proof a pension fund is.
"The collective defined contribution system will get a proper place within the legislation," Frans Prins, director of the Foundation for Company Pension Funds OPF responded. On his wish list is still a less formal and cheaper way for companies to join a company pension fund, and less government interference with e.g. discounting and refunding contributions to employers.
"Moreover, a scheme's board of participants shouldn't be allowed to veto policy changes on indexation and investment, as the PvdA now has proposed. These decisions must stay with the board of the pension fund," Prins stressed.
The Dutch Association of Insurers, or VvV, is in general satisfied with the discussions so far, spokesman Hennie Zoontjes indicated. "We'd like to get a two-years period for adjusting all the pension contracts," he stated. The VvV also supports a national pensions register, he added.
The plenary discussions on the Pensions Bill in parliament will take place on 21 September, before the Senate will have a final debate.
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