NETHERLANDS - The Dutch Association of Industry-wide Pension Funds (VB) has launched a media campaign after research suggested a large majority of the public is very critical about pension fund investment strategies.
A survey, commissioned by the VB, revealed that 61% of respondents believed pension funds should invest assets in cash or savings accounts, and that this should even be made mandatory.
Only 29% of the 520 participants in the survey - conducted by research bureau Motivaction - supported pension funds investing in, for example, equities. Women in particular showed a strong risk-averseness, the study suggested.
Over two-thirds of the participants in the survey stated that pension funds should only be allowed to invest in low-risk asset classes, whereas 50% even considered the investing of pension contributions as ‘scandalous'.
According to the researchers, approximately 50% of the interviewees are not able to estimate the differences in long-term returns between saving and investing, adding that the returns from saving are often overestimated.
"Had we only been saving, our cover ratio would have been over 40% lower, or pension contributions would have been 70% higher during the past 25 years", commented Gerard Riemen, director of VB.
He stressed that the VB will increase its drive to get its message across, "because if we stop investing, we all face a poor future after retirement".
VB has 80 member schemes, representing 4.7 million active participants, over 1.2 million pensioners and 6.8 million deferred members.
"We are convinced of the added value of collective investing and diversifying risks, rather than one-sided solutions, such as bank saving," Frans Prins, director of the Foundation of Company Pension Funds (OPF), commented.
"However, in our opinion, the trust of the public comes and goes with the investment results," he added. The OPF is not taking part in the media campaign.
The Union of Occupational Pension Funds (UvB), whose members are funds for professional groups such as doctors and lawyers, indicated that it was also not taking part in the VB's media offensive. "So far, we have hardly received any critical signals from our members' participants," responded UvB director René Bastian.