Dutch MPs accuse insurers of 'dishonesty' over PPI vehicle
NETHERLANDS - Pieter Omtzigt, MP for the Christian Democrat party in the Netherlands, has accused Dutch insurers of being "dishonest" in their quest for the new cross-border pensions vehicle Premium Pensions Institution (PPI).
During a meeting between parliament and social affairs minister Henk Kamp, Omtzigt said: "I feel taken for a ride by Dutch insurers, which claimed that the PPI was not destined for the Dutch market."
The MP referred to the fact that the PPIs in operation to date have been active in the local market only, while the explicit purpose of the pensions vehicle was to offer cross-border defined contribution arrangements.
Paul Ulenbelt, MP for the socialist party, was also unhappy with the fact PPIs operate solely in the Dutch market, describing the pensions vehicle as a "jemmy" for pension plans.
The PPI is a low-cost and transparent scheme, which has outsourced its financial risks with an insurer.
So far, the Dutch pensions supervisor has issued eight licences for a PPI to insurers, banks and a pension provider, or joint ventures between these institutions.
In the opinion of social affairs minister Kamp, there is nothing wrong with the PPIs that have been licensed to date. He noted that not all of them had become active yet and said it was too early for a proper assessment.
He promised to address the issue soon in a letter about the General Pensions Institution (API) - the new vehicle for cross-border defined benefit arrangements that has been under development for several years.
Rudi Buis, spokesman for the Dutch Association of Insurers, also disagreed with the MPs' complaints.
"Omtzigt's statement is peculiar, as PPIs haven't been initiated by the insurers but by the Dutch government in order to put the pensions sector in a better position for international competition," he said.
"Moreover, the PPI has not only been adopted by insurers, but also by other players."
But Omtzigt told IPE: "During the consultation with parliament, the insurers have always stressed that they intend deploying the PPI and the API for multinational companies with also a Dutch office.
"The insurers have said one thing and done the other thing. Had they targeted the local market, they should have made this clear.
"Operating a PPI on the local market could come at the expense of pension funds."