NETHERLANDS - Banks must be allowed to offer tax-friendly products for additional pensions, according to a majority of MPs in the Dutch parliament.
At present, only saving for deferred annuities through insurers is subject to tax allowances. This gives a competitive advantage to insurers, resulting in a monopoly and higher fees, claim two MPs Staf Depla and Stef Blok, representing respectively the labour party (PvdA) and liberal party (VVD).
The MPs have tabled an amendment, which is supported by the Socialist Party and will result in a majority. The Christian Democrats (CDA) have not decided yet, spokesman Pieter Omtzigt said.
"Surveys have shown that insurers charge large fees. That must be stopped," Depla stated. "We want to encourage competition, to decrease the costs," Blok added. Both MP's also want to end the insurers' monopoly on tax-friendly savings products for mortgages.
Depla and Blok aim at employees with a pension gap and self-employed, who are saving for an additional old-age pension. "At the moment they are forced to deal with insurers, whose fees are high and non-transparent," they said.
Last year, Depla claimed that banks are able to sell annuities at a cost of 1%, as against 7% charged by insurers.
"We aren't afraid of competition. Banks can't offer cheaper products, because they must meet the same legal requirements a insurers," Hennie Zoontjes of the Dutch Association of Insurers VvV commented.
"In our opinion, the MP's initiative is a missed opportunity. They should rather have opted for a less complicated legislation on deferred annuities. We think this ‘fiscal Christmas tree' is the main obstacle for workers and self-employed who want to fill their pension gap."
A spokesman of The Netherlands' Bankers' Association NVB said he cannot comment on the costs issue. "We are waiting for the conclusions of a study, by an independently-chaired committee of the statistics centre of the VvV," he said.
"We are very enthusiastic about this proposal, which will increase competition and drive down prices. "We are ready to sell pension products," a spokeswoman of ABN AMRO responded. "However, to make such products more transparent and attractive, the present legislation needed to be simplified," she also stressed.