Dutch regulator to reveal pension funds' liabilities, interest hedges

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The Dutch regulator, De Nederlandsche Bank (DNB), is to start publishing pension funds’ liabilities, levels of interest hedge and scale of fixed income holdings.

The regulator, which already publishes information on coverage ratios, assets under management and returns, has argued that transparency on individual schemes’ liabilities will be essential for providing clarity on pension funds’ balance sheets.

“Despite high returns,” the Dutch Ministry for Social Affairs said, “a pension fund’s coverage ratio could drop as a result of its susceptibility to movements in interest rates, which affect their liabilities. By also publishing the level of liabilities, the public can gain better insight into developments at a pension fund.”

The ministry said the regulator would also make clear which part of the liabilities were attributable to the scheme itself, participants or re-insured arrangements, adding that it would make a similar distinction for the investments.

According to the ministry, the regulator will also start publishing the level of interest hedge to provide insight into how much of a scheme’s performance is attributable to its interest cover.

The ministry further said pension providers must give information on investment risk free of charge, if requested by participants.

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