NETHERLANDS - Finance minister Gerrit Zalm has told parliament in a letter that the two pension funds of the central bank will be merged and detached from the sponsor.
De Nederlansche Bank gained an extra pension scheme when it merged with the pension and insurance regulator PVK, or Pensioen- & Verzekeringskamer, last year.
The new move has been taken to avoid the appearance of a conflict of interest as the DNB is now the pensions watchdog.
The DNB-PVK merger hit the headlines when it emerged that the governors of the bank and regulator enjoyed pension privileges while demanding stringency from the rest of the working population.
The two funds will merge into one company scheme, which will keep its earlier negotiated arrangements, e.g. its indexation policy and its way of financing. The governing structure will be changed according to proposals made by an external consultancy.
The risks of insurance and investment will be fully set apart with a separated department. Certain office-holders at the DNB will be excluded from board membership at the new scheme.
In addition a new independent supervisory board will be established. Administrative tasks in which the DNB can’t take part any more will be put out to contract.
DNB decided not to link up with an industry-wide scheme. According to its adviser, the present legislation isn’t totally clear about the conditions for such a move. The industry-wide schemes have their own individual policies, said the consultancy.
The DNB’s decision was partly based on the fact that the structural costs will remain the same.
The planned changes of the governance structure will guarantee the independence between the watchdog DNB and its pension scheme, Zalm said.