NETHERLANDS - The pensions supervisor De Nederlandsche Bank (DNB) says that a number of pension funds underestimate the risks they are exposed to in their investment policies. This was made public at the yearly gathering of pension funds managers organised by DNB, held yesterday.
Those risks do not only relate to external factors and to the strategic financial course taken, Joanne Kellerman, pensions director at DNB, said during the meeting. "They also relate to some extent to issues like an active investment policy, complex derivative transactions or the outsourcing of activities."
The ten pension funds concerned recently received a letter from DNB explaining the findings of the regulator. Kellerman did not comment any further on the situation and left the meeting immediately after her speech.
An independent committee of experts under supervision of Jean Frijns, former director of investments at Dutch pension fund ABP, will evaluate the financial assessment framework (FTK) as part of a broad study into the future of the Dutch pension system. It will now be asked by DNB to pay extra attention to the investment policy and risk management of pension funds. The research results produced by DNB will be used as an input to the evaluation.
The committee, which was put in place last month by the social affairs minister, Piet Hein Donner, will analyse the developments in the composition of investment portfolios at all Dutch pension funds and will make recommendations for the future. Additionally, the regulator itself will, in consultation with representatives in the pension sector, look at issues that can be improved.