NETHERLANDS - Dutch pension funds, which have more than €800m in combined assets, should begin incorporating into their investment policies the impact they can have on financial markets, according to professor Paul de Beer.
Speaking at the recent Institute for International Research congress on the repositioning of pension funds, De Beer - a labour relations professor at Amsterdam University - said Dutch schemes had contributed to market instability due to their sheer size.
He also argued that pension funds should seriously consider "contributing to society" by buying mortgage portfolios from banks, for example, in order to provide banks with financial space for issuing corporate loans and new mortgages.
"Ultimately, this could also be beneficial to their participants," he said.
De Beer's call comes after similar comments by Bernard Wientjes, chairman of Dutch employer group VNO-NCW, who argued that funds should take on some of the €650bn in mortgages held by domestic banks to allow for increased lending.
The idea was dismissed by a number of funds, including ABP and PMT.
With respect to the new pensions contract following the Pensions Agreement, De Beer said the notion that risk-sharing among the generations could be defined clearly was an illusion because "future risks, by definition, can't be known".
Because fixed rules can lead to injustice, a flexible approach should be taken instead. However, to prevent certain participant groups from railroading key decisions, seats for "general interest" should be created at pension funds' boards, he said.
In his opinion, all current nominal pension contracts should be converted into contracts with a real pension target, as nominal contracts offer "no certainty at all because of the eroding effect of inflation".
"Therefore," he said, "objections that such a conversion comes at the expense of 'acquired pension rights' don't make any sense. Moreover, having two different pension contracts decreases clarity and trust among pension funds participants."
Speaking at the same congress, Koos Haakma - partner at Mastermind, an advice bureau for transition management in the financial sector - called for a "fundamental simplification" of the Dutch pensions system.
He said pensions saving should be mandatory for all and based on a basic average-salary pension plan, with third-pillar arrangements for part of the salary.
"In addition," he said, "lessons on financial planning should already start at primary schools."