Question marks have appeared over the law covering ‘general’ pension funds, or APFs, in the Netherlands after Unilever’s schemes said regulatory approval to convert to the new vehicle had been delayed.
Speaking at a recent Euroforum conference, Rob Kragten, director of both schemes, said Dutch legislation had seemingly failed to account for company pension funds wanting to convert into APFs.
Unilever has a closed, €4.8bn, defined benefit scheme called Progress and a new collective defined contribution pension fund called Forward; it is looking to bring the schemes together into an APF solely for the company.
It is the first company in the Netherlands to have applied for an APF license.
The new vehicle is designed to serve as a low-cost alternative for smaller pension funds considering liquidation but wishing to preserve their identity.
It allows for different pension plans to operate under a single, independent board, with individual schemes’ assets ring-fenced.
To date, take-up has been almost exclusively the preserve of insurers, with Aegon, Delta Lloyd, ASR, NN and Achmea having established their own general pension funds.
Recently, Aegon received the first licence for an APF to be run by its subsidiary TKP, while PGGM – asset manager for the €172bn healthcare scheme PFZW – is the only pensions provider to have set up an APF.
Kragten said Unilever’s chief motive in launching the APF had been to streamline board structure, as Unilever’s two pension funds already co-operate on asset management and pensions administration.
He suggested that APF legislation, however, had failed to account for company schemes converting into general pension funds.
“The regulator’s inquiries often address the business model and price setting, but these subjects hardly apply to our case,” he said.
Kragten took pains to emphasise that slow progress on regulatory approval had not been due to any objections by the watchdog but rather the uniqueness of the application.
For example, an integrity analysis – already completed – had to be repeated, as only later had it become clear that the criteria for banks and insurers had to be applied.
Kragten said Unilever had aimed to have the APF up and running by 1 July, and that he had had to invest much time and effort in the process for “relatively little result”.