The Netherlands missed an “opportunity” when it failed to create a cross-border pensions vehicle straightaway after the introduction of new European legislation, according to Sjoerd Gunnewijk, chair of the €1.2bn Dutch pension fund for BP, which plans to relocate to Belgium this year.

In an interview with IPE sister publication Pensioen Pro, Gunnewijk said BP decided to establish its pan-European scheme in Belgium because the country had already moved to support the creation of cross-border pension schemes.

He said BP wanted to combine local pensions activities to cut costs and improve governance.

“As a result, financing, asset management and part of the governance can be carried out centrally, and we don’t need to hire investment consultants in the Netherlands any longer,” he said.

BP’s pension funds in Ireland, Spain and Switzerland have joined the new pan-European scheme.

In the interview with Pensioen Pro, Paul Koole, a board member at BP’s Dutch pension fund, said he expected the “Belgian route” would be particularly attractive for financially strong multinational companies, “as the Belgian regulator demands a guarantee from the sponsor”.

Gunnewijk, meanwhile, took pains to emphasise the BP scheme was not “running away” from the Netherlands.

“We don’t have problems with the new financial assessment framework or supervisor DNB, although we have spent a lot of money and time implementing all the new regulations in recent years,” he said. 

“The same goes for the reduction of tax-facilitated pensions accrual, which made it impossible for us to keep our final salary arrangements.”

The chairman added that Dutch fiscal rules – as well as the social and labour-related aspects of the Dutch Pensions Act – would still apply to its pension rights in Belgium.

When asked about the advantages of the cross-border plan, Gunnewijk cited the increased sponsor guarantee, comprising an additional contribution to a funding level of 110%, as well the lower threshold for indexation.

“The latter was made possible by the lower discount rate for liabilities, which increases the chance of extra returns,” he said.

Gunnewijk also confirmed that the pension fund would not raise its risk profile under Belgian rules.

The BP scheme’s works council (OR), as well as its accountability council, have already approved the planned relocation, which now awaits the green light from both countries’ regulators.

Gunnewijk is to become chairman of BP’s European pension fund, while Koole will join its board.

The rest of the Dutch scheme’s board is to form a pension-rights advisory council for the pan-European scheme, replacing the accountability council in the Netherlands.