Donner to allow 'multi-fund' for smaller schemes
NETHERLANDS - Social affairs minister Piet Hein Donner is planning to unveil legislation which will allow small company pension funds to work together as a multi-fund scheme but leave the individual scheme's assets ring-fenced.
The minister will table his proposal for a necessary change of the Pension Act in the cabinet this month, confirmed a spokeswoman, though specific terms of the legislation have not been disclosed.
Donner is expected to follow the widely-supported view that existing company schemes should be allowed to merger into a multi-fund, without being required to combine the assets.
The Labour Foundation of employers and employees (Star) has advised the minister to follow the view of the Foundation for Company Pension Funds (OPF), which has advocated a multi-scheme be set up solely for companies with a company pension fund.
The OPF's position is also shared by its fellow-lobbying organisations VB and UvB, as well as the Dutch Association of Insurers (VvV).
The OPF has been pleading for some time for a legal change allowing cooperation between small schemes, as this would provide a way to reduce costs and improve efficiency.
Frans Prins, director of the OPF, indicated the recently-introduced rules for pension fund governance and participants have increased calls for small schemes to be able to join forces.
According to Prins, approximately 25% of the Netherlands' 550 company schemes have already decided they cannot continue to act independently, and the new governance structure is said to be having a greater impact on this decision than the credit crisis.
"If Donner's proposal gets the green light, the multi-fund could be introduced quickly and effectively," commented the OPF director.
The Star had dismissed Donner's initial proposal to create an entire new kind of pension provision, alongside company scheme, industry-wide pension funds and schemes with insurers, as this approach would require a drastic change of the legal demarcation of tasks between pension funds and insurers.
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