Consumer body rallies against recovery plan delay
NETHERLANDS - Consumentenbond, the large Dutch consumers' lobbying organisation, has spoken out against calls for a more generous recovery period for underfunded pension funds.
The body is instead arguing pension funds should increase the involvement of its participants in drawing up recovery plans in order to achieve a sufficient cover ratio.
"Schemes should consider allowing their participants a direct and individual say, such as the right of shareholders to speak at the start of the shareholders' meeting," said Barbary den Uijl, spokeswoman of Consumentenbond.
Any delay in recovery plans will create false expectations among participants about their future pensions, according to Consumentenbond.
"Moreover, there is a real chance that delay will worsen the situation," the organisation added.
Pension funds' participants must be given clear information about the impact of the credit crunch on their pension, ‘even if this means bad news', in the opinion of the Consumentenbond officials.
"In order to be able to judge whether they need to buy additional pension insurance, participants need to know the value of their pension now," officials added, noting if this information only arrives five, 10 or 15 years down the road, members could find it is too late for additional measures to be effective.
That said, the Consumentenbond's view is at odds with the position of the Association of Industry-wide Pension Funds (VB), several unions and employers' representative bodies, who have pleaded for increased recovery time.
In VB's opinion, participants already have an effective say in pension funds through the unions on the board, as well as through schemes' participant councils.
Most pension funds in the Netherlands have a funding ratio of less than 105%, which means they have to submit a short-term recovery plan to regulator DNB.
"We prefer tailor-made solutions. If pension funds submit a healthy long-term recovery plan, the pension regulator De Nederlandsche Bank should be flexible about the now mandatory three-year period of the short term recovery plan," explained Gert Kloosterboer, spokesman of VB.
The Foundation for Company Pension Funds (OPF) has expressed a similar view on its website.