Dutch supervisor De Nederlandsche Bank (DNB) said it would assess whether pension funds and asset managers were ready for switching to a new pensions system.
In documents published this week outlining its vision of future supervision, DNB emphasised that preparation was essential for a smooth transition, describing the planned reforms as “a significant change”.
Dutch pension funds have previously been urged to get ready for system reforms only for the changes not to materialise.
However, DNB said that, although the new system was not yet fully developed, “a transition seems to be unavoidable as the need for innovation is only increasing”.
It made clear that it would assess pension funds’ administration capabilities for flexibility, indicating that current IT systems were often outdated.
Next year, DNB will complete an overview of outsourced administration in a survey that it started this year.
The watchdog said it would also follow up on a survey of pension funds’ visions and strategies, in a move aimed at increasing their operational, organisational and board flexibility as well as resilience.
As part of this, DNB is to monitor how pension funds implement strategies and how they anticipate vulnerabilities and risks.
The regulator said it would also assess how asset managers prepared for the anticipated change from collectively managed pension assets to individually accrued pensions as well as the adoption of a greater variety of pension plans.
DNB added that it would look into asset managers’ business models in a competitive market.
In its outlook for the next four years, the watchdog also said it supported convergence of European pension fund supervision. This seems to be at odds with the new government’s intention to resist “new European infringements” on the local oversight of pensions.
However, in the same paragraph, DNB said that it didn’t actually expect European harmonisation on pensions.