NETHERLANDS - One of the leading figures in the Dutch pensions industry has issued a broadside against the Dutch government's supplementary pensions policy.
Under the guidance of social affairs minister Aart Jan de Geus "government policy for supplementary pensions in the Netherlands is approaching a disaster", retired managing director of Shell Pension Fund Kees van Rees told IPE in an interview.
In the attack, Van Rees also criticised Netspar's professor Lans Bovenberg for his guidance of De Geus and his Christian Democrat party in pursuing this "unholy road", calling Bovenberg a "prophet of bad news".
"His denial of the opportunities in the financial markets has contributed to the existing government policy on pensions," he said, adding "and he was too conservative in his calculations."
Van Rees, who is "deeply worried" about the pension sector and says to have picked up on similar complaints from the Dutch pension industry, feels that many industry officials, though agreeing, do not want to speak out.
According to Van Rees, government overreacted to the financial market correction of 2000-2002: "The government did not realistically look at what really happened and issued a harsh reaction."
The government neglected to acknowledge the "very reasonable" returns of pension funds on the long term, "which is evident over the longer period before 2002 and the average returns of pension funds between 1995 and 2005," he says.
According to Van Rees, government reacted nervously as if "the world was perishing" - even though market correction at some point is normal.
"New supervisory powers were brought in that have effectively led to a decline in member rights of active members and absence of inflation compensation of many schemes; contributions have skyrocketed," he says.
Also he argued that advisers and investment managers "love these policy changes," as it offers them much work and income, due to which, however, smaller pension funds see their costs shoot up: "Bureaucracy has intensified, though without much benefits to funds and its members."
He also argues that the new FTK will lead to further risk aversion, in view of the need to react to short term volatility, and consequently a "further erosion of schemes".
"De Geus is politically responsible for this development," he says, adding: "Politicians seriously overreacted in terms of policies and measures, and I blame De Geus, even more because I thought him to be someone who is familiar with the sector."
De Geus declined to comment on the issue; Lans Bovenberg said he did not understand Van Rees' critique, arguing that he has not advised the government very much on pensions, apart from on the ‘levensloop' (life course) schemes.
Bovenberg said he is not an adviser for pensions and does not have as much influence as people think: "That is too much of an honour, I don't have so much influence; if there is an evil genius behind this, it certainly isn't me."