The EU pension directive has opened the way for the Netherlands to become a superb operating base for asset management, says Dirk Witteveen, director of pensions regulator De Nederlandsche Bank.
“The Netherlands have already a wide experience with the directive’s ‘prudent person’ approach of the investment rules. Pension fund are in principle allowed to invest in anything,” Witteveen stated during the annual meeting of the Dutch Fund and Asset Management Association.
Witteveen quoted a recent OECD study as saying that the Netherlands has imposed the slightest restrictions on investments. “So Holland offers ample opportunities for optimising returns on investments. By that, we have gained relatively more experience on alternative investments,” he explained.
“Moreover, the directive appears to be a catalyst for existing international opportunities, such as asset pooling for pension funds,” the DNB director added. “With its Fund for Joint Account(see page 5), the Netherlands offers a similar alternative to the praised structures of Luxembourg and Ireland.”
In order to help the Netherlands keep its lead of its advanced pension system, Dutch asset managers should focus on their core task, Witteveen stressed.
“Policy decisions on pensions must be taken by pension fund governors and the social partners. Your services – transparent on returns, risks and costs - should fit in with the clients’ preferences,” he told his audience.
According to the DNB director, in 2004 only 30% of the €625bn investment portfolio of the Dutch pension funds was invested in domestic asset. Two-thirds of the assets have been contracted out. Fifty percent of those assets are invested by foreign players.
The combined assets of the Dutch schemes is more than the total national GDP, which puts Holland top worldwide.