NETHERLANDS - Supervision of Dutch pension funds will be simplified following lobbying from the country's regulators, social affairs minister Henk Kamp has announced.
In a letter to Parliament dated 27 January 2011 - a response to memoranda from both De Nederlandsche Bank (DNB) and communications watchdog Autoriteit Financiële Markten (AFM) about bottlenecks in pension legislation - the minister announced a review of his department's relationship with both regulatory bodies.
The AFM stressed the need for simplicity of pension arrangement, as well as clarity of communication between pension funds and participants, while the DNB had emphasised the importance of a financially sustainable and practicable pension system supported by all generations.
Kamp indicated that he will consider whether the new supervisory framework should focus on a set of criteria, as advocated by the AFM, or on explicit rules, as preferred by DNB.
Both supervisors believe that the requirements for expertise, skills and professional conduct of board members and internal supervisors of pension funds should be raised to the level applied to insurers and banks.
They said they were already preparing legal adjustments, in cooperation with the ministry of finance, which is responsible for that area of supervision.
The two regulators also advocated a restrained remuneration policy at pension funds, in order to prevent too much risk-taking.
Additionally, they called for a tighter supervision on tasks that have been contracted out by pension funds.
The DNB noted: "Despite the attention for increased professionality and good governance, not much has been implemented yet."
In December, Minister Kamp said his pension priorities for 2011 were the new pension contracts and a matching financial assessment framework (FTK), as well as a bill for pension fund governance, including oursourcing of tasks.
He said he also wanted to deliver a solution for the additional payments that often come as part of value transfers.