Jetta Klijnsma, state secretary at the Dutch Ministry of Social Affairs, has scrapped a proposal in the Bill for the ‘general pension fund’ (APF) that would have allowed industry-wide pension funds to merge while ring-fencing their assets.
Her decision follows the recommendation of the Council of State (RvS), the highest legal adviser for the government.
Klijnsma will now present a revised Bill before the Lower House.
The initial proposal is to be debated in the Senate.
The ring-fencing proposal had been added to the APF Bill after MPs Helma Lodders of the liberal party (VVD) and Roos Vermeij of the labour party (PvdA) tabled an amendment, which the Lower House adopted by unanimous decision.
At the time, however, Klijnsma warned that the added clause could undermine the principle of mandatory participation, and therefore called on the RvS for advice.
The RvS concluded that the ring-fencing of assets at mandatory industry-wide schemes would distort the market, improving a merged scheme’s competitive position relative to other pension providers, such as insurers.
It also claimed the amendment was “incomplete”, as it failed to clarify exactly how ring-fencing would maintain the distinction between the existing multi-company scheme and the proposed APF, which is meant to replace the multi-scheme.
The Dutch Pensions Federation, responding to Klijnsma’s decision, warned against further delays in the APF’s introduction, now scheduled for 1 January 2016.
It said it also disagreed with the RvS’s conclusion that the amendment would have distorted the market.