EUROPE - Dick Sluimers, chief financial officer at Stichting Pensioenfonds ABP, has criticised the UK pension system.

He argued that highly paid investment managers and advisors were a waste of money for pension funds. Furthermore, he criticised the UK pension reforms, saying that he does not see how it will work out and how the poorest will benefit.

Sluimers was speaking at the afternoon session of the Transforming European Pension Systems event in London organised by the UK's Centre for Economic Policy Research and the Netherlands' Netspar network.

He summarised pension challenges in the Netherlands, mentioning the Dutch pension reform, the FTK. He concluded that collective pension schemes are superior to individual schemes, and said that there is more differentiation and choice within collective pension systems.

Netspar's Professor Lans Bovenberg told IPE that Dutch employers are very unhappy about the new indexation label for Dutch pensions.

Bocconi University's Tito Boeri and Bovenberg both argued for the introduction of notionally defined contribution systems. Boeri said that collective arrangement schemes should treat young and old generations differently, arguing for hybrid DC (for young) - DB (for older people) schemes.

He also said that trustees need to be trained and pension schemes should include outside professionals, while limiting their reliance on pension fund advisors.

Bovenberg argued that accounting and funding standards need to be harmonised on a global scale, to create a more level playing field. "We don't welcome a shift to individual DC, we want a third way stand alone pension fund," adding: "We are in favour of a collective pension fund, with 'hard' compulsion, we favour mandatory participation, to protect people from themselves and if professional investors invest it will probably stimulate long-term macro economic stability."

Topics