NETHERLANDS - The court case by the Dutch Association of Insurers (VvV) targeting the commercial activities of pensions funds ABP and PGGM has been dropped, with De Nederlandsche Bank fining the two giant schemes.
And the move could cast a shadow of the funds’ Loyalis and Careon subsidiaries.
The VvV had filed a complaint alleging that the two largest Dutch funds were actively promoting the activities of the subsidiaries in the Levensloop, or life course, market.
They aimed to provide members the opportunity to obtain levensloop in-house. But according to the VvV, this is not allowed - as pension funds are bound by law not to engage in commercial operations.
At the same time, the insurers were afraid that the two funds would gain a very attractive slice of the levensloop market.
Levensloop was introduced as the new version of ‘pre-pension’ and other savings schemes by the government. Pre-pension, a means of saving for early retirement, was effectively ended by the government as from the start of this year.
ABP and PGGM have been fighting this interpretation of the law. ABP spokesperson Hans ten Brinke said the schemes are currently in discussions with the DNB on the conflict between the strict interpretation of the pensions law and the Law on Financial Reporting.
ABP and PGGM have based their ‘commercial activities’ on the basis of providing full financial openness on all activities they are involved in.
The fact that the DNB keeps to a strict interpretation of the pension law is accepted, but the funds believe this should be changed to take into account other current laws.
At the same time, ABP and PGGM maintain that they have been asked to participate based on the ending of pre-pension and the start of levensloop arrangements.
Loyalis and Careon, the levensloop subsidiaries, will however keep on operating at the moment. But the funds will refrain from direct referrals from their respective websites and fund communications to the two options available.
The size of the fines was not disclosed.