NETHERLANDS - The Dutch cabinet has indicated it wants to make the introduction of collective defined contribution schemes easier by removing certain barriers.
Pension funds will no longer be bound by the initially one-year term before they can discount pension claims and rights, in case they don't have the minimal required own assets, social affairs minister Aart Jan de Geus announced.
Instead, the regulator De Nederlandsche Bank, participants and sponsoring companies have to be informed about any discount decision on pension claims and rights within a month, de Geus said.
The one-year mandatory waiting time doesn't relate well to the legal requirements for the short-term recovery plan for pension funds, the minister explained.
In addition, the regulator doesn't have to agree to discounts in advance any more, because the regulator's agreement for the short-term recovery plan, which already contains possible discounts, is required anyway.
Before any discounts can be applied to pension claims and rights, all available instruments must be exhausted, as long they don't frustrate pension funds' strategic investment policy, de Geus stressed.
The changes to the Pensions Bill come after comments from parliament and the Association of Company Pension Funds, or OPF.
Several companies, such as bank/insurer SNS Reaal, chemicals groups Akzo Nobel and DSM, and construction company Volker Wessels, have already introduced collective DC schemes.
In this ‘available contribution' arrangement, only the premium is fixed. The investment risks are for the participants, instead of the sponsoring company.
Meanwhile, Joep Schouten, chairman of pensions provider Cordares, has pleaded in favour of the introduction of the Pensions Bill as of January 1 2007, as initially planned.
The collapse of the cabinet mustn't affect the scheduled discussions within parliament for the sake of clarity for pensioners and workers, Schouten argued in the Het Financieele Dagblad newspaper.
"Uncertainty undermines the system. The present hard-fought sector-wide agreement could become up for discussion again, and could lead to other ideas and amendments. Pension funds will wait with the introduction of new basic principles, IT systems and investment scenarios," Schouten said.
Cordares is one of the five largest pensions providers. It carries out 27 different schemes for 25,000 employers and over 1m. It has €23bn under management.