Netherlands roundup: Schemes ‘must reclaim mistakenly paid benefits’
Pension funds have a legal duty to reclaim pension benefits that have been paid out by mistake, according to Dutch social affairs minister Wouter Koolmees.
Answering questions posed by MP Pieter Omtzigt, he said that pension funds should also focus on the outcomes for members in order to avoid “unnecessary legal discourse”.
Omtzigt – MP for the Christian Democrats (CDA) – wanted to know participants’ rights if they had received benefits without being aware that they were too high.
His questions were triggered by the €407bn civil service scheme ABP, which tried to claw back benefits it had paid based on information obtained from social security bank SVB, which turned out to be incorrect.
As a consequence, 555 pensioners received €12 too much every month, and ABP had asked them to reimburse these benefits.
It decided to refrain from reclaiming from pensioners whose overpayments were less than €12 a month, and promised to fully compensate more than 600 other pensioners who were underpaid.
Koolmees did not comment on criteria for reclaiming pension payments “as this is the schemes’ responsibility”.
He suggested that pension funds should lay down their policy for the issue “with guarantees for content and process”.
KLM’s cabin staff scheme opts for two-tier board
The €3.2bn KLM pension fund for cabin staff (Cabinepersoneel) is to switch from a board of equal representation to a two-tier board as of 1 July.
The new board will comprise three external executive members and six non-executive trustees representing workers, pensioners and the sponsor, under by an independent chair.
In the new board model, the non-executive members will operate as a supervisory board, supported by an external audit committee.
Currently, the pension fund has a single 10-person board.
On its website, KLM Cabinepersoneel explained that finding new board members had become increasingly difficult legal requirements for trustees had become stricter.
It believed a two-tier board would solve this problem while maintaining communications with and accountability to the scheme’s membership.
The new board will remain accountable to the pension fund’s accountability body.
The pension fund indicated that board costs would rise slightly, but would be offset in part by better decision-making and lower implementation costs.
The KLM pension fund is not the first scheme opting for the two-tier board, which became a legal option in 2014. The Dutch schemes of Philips (€18.5bn), IBM (€4.5bn), Ahold Delhaize (€4.6bn) and ABN Amro (€26.5bn) have already adopted the model, as have the industry-wide schemes PME (€47bn), Schoonmaak (€5bn) and SBZ (€5.4bn).
In January, the €1.3bn pension fund of shipping firm Nedlloyd announced a plan to adopt the two-tier model.