NETHERLANDS - Dutch politicians must provide clarity on the governance model of new API funds, otherwise their improvement will be delayed and the export of pension expertise will not materialise, according to pensions expert Lans Bovenberg.
According to the director of Netspar, the think-tank on pensions and ageing, the introduction of the ‘general pension organisation', or API, will allow the social partners to significantly improve their responsibilities on governance.
Professors Arnoud Boot and Berend Jan Drijber recently came up with the idea of an API, a legal organisation operating on a European scale and offering a wide range of products. It will offer much more leeway to pension funds. Insurers and banks will also be allowed to start such an organisation.
"The attractiveness of APIs is that different models of governance can show to full advantage", daily Het Financieele Dagblad quoted Bovenberg as saying.
"The social players could even own an API, and for example, join a one-tier board as non-executive governors. They could also create a supervisory board," Bovenberg explained.
The Netspar director supports a pension market of commercial and not-for-profit players, because they keep each other focused, he indicated. "But I doubt whether commercial players always work more quickly and cheaply. Their costs of implementation and marketing are often higher."
According to Bovenberg, politicians must decide on the supervisory requirements for APIs, the range of products they are allowed to sell, and the amount of control to be permitted to social partners.
The discussions should be held against the backdrop of the large markets for the elderly, comprising pensions, mortgages and healthcare, and for active workers, with levensloop as the main component, he explained.
"There isn't much clarity on the API yet. Although I assume it is a sensible concept, a thorough discussion is necessary to discover possible pitfalls," professor Jan Kune commented to IPE.
Dutch pension giant ABP, has already said that the proposed new pension framework isn't an attractive alternative. Instead, it prefers looking at ways to stave off regulatory pressure on its additional insurance products, such as the new tax-friendly ‘levensloop', or life course.