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IPE special report May 2018

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Dutch government looks to add third-pillar figures to Pensions Register

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Jetta Klijnsma, state secretary at the Dutch Ministry of Social Affairs, has said she will consider including third-pillar superannuation figures in the Pensions Register’s estimates for future pension income. 

Up to now, the government’s proposals on pensions communication legislation have focused solely on first and second-pillar arrangements. 

However, the state secretary decided against adding a personal financial-planning tool to the Register to avoid making the system “too complicated”.

Klijnsma made her comments at the Dutch Parliament during the reading of the Bill for pensions communication.

The Bill focuses on first and second-pillar pensions and recommends a four-pronged approach, partly through so-called Uniform Pension Statements (UPOs) of pension rights accrued with a single provider.

The Pensions Register is to show combined pension rights accrued at all providers, and must give an indication – using three different scenarios – of the state pension (AOW) plus additional pensions at the date of retirement.

The Register is also to provide information on participants’ options for additional measures for pensions saving, as well as the effects of life-changing events.

A new instrument – the Pension 1-2-3 – is to explain, on three levels, the key characteristics of a worker’s pension plan.

Pension providers’ websites must contain the Pension 1-2-3, an annual report and an annual account, as well as pension regulations and the contract for pension provision.

It must also show implementation costs.

Responding to requests from Parliament, Klijnsma said she looked favourably on the notion of extending the Pensions Register with the option of also calculating future pension rights drawing on a higher retirement age of 67.

She also said she supported indicating an employer’s contribution in the pensions premium and promised to look for an alternative to the proposed “messages box” to store UPOs, as hard evidence of promised pension rights.

Pieter Omtzigt, MP for the Christian Democrats (CDA), proposed just such a facility, but Klijnsma said this would be too expensive and probably unnecessary, “as most providers and the central government already have a messages box”.

The state secretary said she would no longer make the disclosure of all pension plans mandatory for providers after several political parties warned of increasing costs and complexity – particularly for insurers, which often have thousands of different arrangements.

Klijnsma agreed with the PvdA and VVD’s proposal to limit participants’ ability to switch between receiving digital or paper information to once a year, rather than at any time.

Several political parties took pains to emphasise that the new legislation was not an end product but rather a first step towards the further improvement of pensions awareness among participants.

At least three parties called for a reduction of the number of pension information channels by merging functions.

The new legislation is to come into force on 1 July 2015.

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