Consumers push for increased voice on pension recovery
NETHERLANDS - Consumers' organisation Consumentenbond has claimed pension funds should more proactively involve their participants in important decisions such as drawing up recovery plans.
The lobbying body said it fears schemes will inform their participants about potential changes at too late a stage in the decision process, about the impact the financial crisis will have on their pension.
The body argued although social affairs minister Piet Hein Donner has prescribed pension funds must communicate in a timely and clear manner the fund's recovery plan, this will only happen after the plan has already been drawn up.
In Consumentenbond's opinion, participants should be given a say in how the problems should be solved only after they have been informed about the problems.
"Because pension funds are facing extraordinary circumstances, they should also involve individual participants in finding solutions, in the same way shareholders in a listed company have their say," said Barbara den Uijl, spokeswoman for Consumentenbond.
She acknowledged it is too late for members to participate in any recovery plan now, as these must be submitted to pensions regulator De Nederlandsche Bank (DNB) before 1 April.
"But individual say should apply to every major decision in the future," added Den Uijl.
VB, the lobbying organisation for the industry-wide pension funds, does not agree with the stance being taken by Consumentenbond.
"The stakeholders in pension funds are already having a say through both participants' councils and representatives on the boards," pointed out spokesman Gert Kloosterboer.
The VB said schemes will publish a simplified version of their recovery plans especially aimed at their members, as the DNB has instructed.
Pension funds are only legally required to provide ‘timely and comprehensive' information about the build-up of their pension through the uniform pension statement (UPO) and the ‘start letter' for new participants.
"However, pension funds are of course allowed to give their members an additional say," noted a spokesman of the Authority Financial Markets (AFM), the watchdog on pensions communication.
The AFM is also tasked with ensuring that pension providers and insurers demonstrate a duty of care in cases where defined contribution arrangement offer members freedom of choice on investments.
Already in October, Rajish Sagoenie, executive director of Aon Consulting, urged pension fund governors to be open about their schemes' situation, in order to prevent unrest amongst their participants.
"Clear communication will allow both workers and employers to take measures," Sagoenie argued.
If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email email@example.com