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Dutch pensions governance bill poorly conceived, says Labour Foundation

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  • Dutch pensions governance bill poorly conceived, says Labour Foundation

NETHERLANDS - The Dutch government's bill to improve pension fund governance is poorly conceived and fails to address the new distribution of responsibilities between employers and employees following the Pensions Agreement, according to the Labour Foundation.

The advisory body for companies and workers pointed out that those responsibilities had not been clarified but would still be of great importance for the completion of the new pensions contract.

It said the bill focuses "unilaterally" on governing while failing to take into account the arrangements agreed during the negotiations on labour conditions between employers and employees.

The Labour Foundation said social affairs minister Henk Kamp was jeopardising the sustainability of the Dutch pensions system by trying to push the bill through parliament this spring.

It also argued that the government had placed too much faith in independent external experts on the board.

In its opinion, the proposed board models - an equal representation of employers and employees, and an independent board - differ "fundamentally", with stakeholders having more influence in the latter model.

It called for the reintroduction of the one-tier board as an additional option "because it appears to be an effective and efficient set-up, in particular in Anglo-American countries".

The Labour Foundation also questioned the proposed limitation of employer representation in the event of a maximum contribution and a board model of equal representation.

"Many companies with a pension fund feel the need to be kept involved in the implementation process," it said.

Following the recommendation to make internal supervision by a supervisory board mandatory for industry-wide pension funds, the foundation noted that a framework of checks and balances was absent in the government's current proposals.

The supervisory board, with its right of approval, could easily come into conflict with the board and should therefore be tasked with supervising processes, procedures and risk management, the foundation said.

It also argued that the bill's proposed board representation was too unilateral and ignored the position of younger workers and women.

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