The Netherlands is to vote against the introduction of a pan-European third-pillar pension product (PEPP), despite the fact that most of its objections have been addressed during the negotiations.
Wopke Hoekstra, the Dutch finance minister, wrote to parliament last week stating that he was satisfied with the outcome of negotiations in December between the European Parliament and the European Council.
Nevertheless, the Netherlands would vote against the proposal because of the perceived “limited added value” of the PEPP in the context of the Dutch pensions system. The Dutch parliament also rejected the idea of a European third pillar, Hoekstra added.
He said he expected that a compromise would be adopted by a large majority of EU member states.
In the compromise, countries could decide individually whether they would allow second-pillar institutions to offer PEPPs.
In the Netherlands, this would mean that pension funds and low-cost defined contribution vehicles – known as PPIs – were not allowed to offer third-pillar products.
This was in order to protect mandatory industry-wide schemes and maintain Dutch rules aimed at protecting insurers from unfair competition from pension funds.
The proposal would not have a fiscal affect in the Netherlands either, as the PEPP would be subject to local tax rules for the accrual and payment of pensions.
Sophie in ‘t Veld, Dutch MEP and head negotiator for PEPP on behalf of the European Parliament, chided the Dutch government’s approach.
“We have got our way, but are still to vote against the compromise proposal. What sense does this make?” she said in an interview with IPE’s Dutch sister publication Pensioen Pro.
The full text of the compromise will become available after the member states have voted on the proposal later this month.