AFM to step up communications supervision
NETHERLANDS - The Authority Financial Markets (AFM) will step up its supervision of pension funds to ensure they properly apply the requirements of communicating to their participants.
The increased checks being announced follow a survey of 25 schemes - of both company funds and industry-wide schemes - which were found to have the worst performance record in 2007 under self-assessment, the watchdog on pension communication has indicated.
The AFM said its survey revealed two-thirds of this group had still not set up their uniform pension statement (UPO) by August last year, even though it became mandatory from 1 January 2008.
Other schemes did not base their UPO, nor the accompanying clarification, on the required model either, suggested the AFM.
And almost all of the introductory letters for schemes' new participants reviewed - the issuance of which also became mandatory from 1 January 2009 - lacked information, according to the regulator.
The AFM also noted pension funds did not alert new participants to their right to ask for information about the scheme's cover ratio or a possible recovery plan.
The regulator has been tasked with supervising the ‘timely, correct and full' information given by pension funds to their participants but because it found the criterion ‘timely' is being interpreted in different ways, it has proposed to set the deadline for communicating information to members as 30 June over the coming years, and will still consider 30 September as the latest possible date in 2008 by which schemes should have first acted.
Harman Korte, chief supervisor of the behaviour of pension providers at the AFM, announced in November there would be "formal measures" taken if pension funds did not send out their 2008 UPOs by the end of last year.
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