The Netherlands’ corporate court will not instigate an investigation into possible mismanagement at the Dutch pension fund for dental technicians (Tandtechniek).
It rejected the demand for an investigation by the scheme’s accountability body (Verantwoordingsorgaan, or VO), concluding that the VO’s interpretation of its own role was “too liberal”.
Last year, the VO brought the court case – the first ever initiated by an accountability body – as it was dissatisfied with the pension fund board’s policy. The accountability body also asked the court to sack the board and replace it with an administrator.
However, the court verdict said the VO had failed to appreciate its role, explaining that case law showed the accountability body was meant to advise on decision making and policy rather than take action directly.
The court largely blamed the VO for the troubled relationship with the pension fund’s board.
“The conclusion is that the VO is unwilling to contribute to a workable relationship with the board as well as the supervisory board,” it said.
Although the court said it was unfortunate that the pension fund had placed an unofficial version of its annual report on its website, it concluded that this was not a valid reason to question the scheme’s policy.
In a response, the VO called the verdict “unsatisfactory” and said it also disagreed with the limited role the corporate court saw for the VO.
“This way, it is no more than a discussion group,” commented Hans van Meerten, the pensions lawyer representing the accountability body.
In his opinion, the upcoming evaluation of new governance legislation would be a good moment for the political parties to clarify the VO’s role.
Van Meerten said that the VO was considering further legal steps, as the verdict could still be challenged at the high court (Hoge Raad).
The pension fund’s board said it was pleased with the conclusion of the corporate court.
Last September, it warned that the VO’s decision to ask for a court’s assessment of the board’s work could “seriously delay” the scheme’s plan to join PFZW as well as the implementation of its pension plan.
At the time, Rob van Leeuwen, Tandtechniek’s chairman, said that the board’s decision to liquidate and transfer pension rights to PFZW was supported by its independent internal supervisors (RvT).
“And our annual reports have always been approved by both the RvT and the external accountants,” Van Leeuwen added.
Four years ago, the VO accused the board of “substandard performance”, such as relying too much on its pensions provider and asset manager Syntrus Achmea, and waiting too long to introduce a strategic interest rate hedge as well as a dedicated risk committee.
At the time, it noted that the combination of necessary rights cuts and lack of indexation had caused participants to lose 30% of their pension rights.
At the end of November 2017, funding of Tandtechniek stood at 92.2%. As a consequence, the scheme’s participants are most likely facing another significant rights cut when Tandtechniek joins PFZW.