Netherlands doubles down on new rules for pension scheme transfers
Wouter Koolmees, the Dutch minister for social affairs, has defended his decision to set stricter rules for collective cross-border pensions transfers, arguing that the IORP II directive makes a distinction between local and cross-border transactions.
During a debate in parliament about the implementation of the directive in the Netherlands, he emphasised that stricter conditions were not at odds with European legislation.
Koolmees’ remarks were in part a response to comments from Hans van Meerten, professor of European pensions law at Utrecht University, in an article in IPE’s sister publication Pensioen Pro. Van Meerten argued that the same rules must apply to all value transfers under EU law.
Politicians for several Dutch political parties pushed Koolmees for a response. Erik Lutjens – professor of pensions law at Amsterdam’s Free University and a candidate for the senate for 50Plus, the party for older people – agreed that applying stricter conditions for approving a transfer to another EU state violated European law.
Raising barriers for transfers would make it more difficult for foreign pensions providers to implement cross-border arrangements, argued Lutjens. In his opinion, Koolmees’ policy was “an illegal distinction based on place of residence”.
However, the minister disputed this conclusion, contending that the crucial element was that the pensions directive itself made the distinction.
He added that this point was extensively scrutinised by the Raad van State, the Netherlands’ highest legal college.
The minister’s explanation, however, didn’t satisfy Martin van Rooijen and Steven van Weyenberg, MPs for the 50Plus and D66 parties, respectively. They said they wanted more clarity.
During the debate, Koolmees advised against adopting an amendment requiring funds transfering out of the Netherlands to be fully funded by Dutch standards, which equated to a funding ratio of at least 125%.
The amendment was tabled by Christian Democrat MP Pieter Omtzigt and Eppo Bruins, for the small religious party Christen Unie.
A transfer within the Netherlands is already possible if a pension scheme’s funding ratio is at least 105%.
The debate about cross-border transfers was triggered by Aon’s decision to move its Dutch pension fund to Belgium. The move improved the scheme’s funding due to a difference between the countries’ regulatory systems.
Koolmees added the stricter conditions to the IORP II implementation bill after several MPs objected to what they saw as “supervisory arbitrage”.