NETHERLANDS – Further criticism about the new Financial Assessment Framework for pension funds emerged last week at an industry gathering.

A major issue was the fact that the Dutch Central Bank is sticking to its rule that pension funds must repair sub-100% coverage ratios within a year.

The issue was voiced by Guus Boender of consulting firm ORTEC and Elske Ter Veld, a former Labour Party politician and currently head of They were speaking at a ‘Pension Summit’ organised by ING BNY Securities Services.

Boender said the year limit was unreasonable and showed a lack of market knowledge. Ter Veld proposed letting pension funds, under strict conditions, repair their under-coverage within five years.

Boender said the practical implementation of the DNB coverage rule would not be feasible. He indicated that if the DNB keeps to this rule - while additionally implementing the market value rules - this could lead to an overall coverage ratio at most pension funds of below 100%.

This would be disastrous, as Dutch pension fund assets almost the equivalent of government debt. Most delegates at the meeting agreed with Boender’s analysis that the real situation of current pension issues will become apparent with the full implementation of new International Financial Reporting Standards.