One of the partners in the Netherlands’ coalition government says it will legislate for diversity rules for pension fund boards next year if schemes fail to implement agreed changes voluntarily.
The liberal democratic party, D66, led the calls but other parties are said to support the move.
“For years, pension funds haven’t stuck to their promise to improve diversity among their trustees, and we have reached the limit now,” said D66 MP Steven van Weyenberg, quoted by Dutch financial newspaper FD.
According to FD, opposition party GroenLinks also expressed dissatisfaction with pension boards’ diversity, while Social Affairs minister Wouter Koolmees – also a D66 MP – has promised parliament he would address the sector on the subject.
Five years ago, a special code for pension funds was established in which the sector agreed that boards would include at least one male and one female trustee as well as a trustee aged under 40.
In the wake of the agreement, a manual for diversity was introduced. In addition, the PensionLab was established to help people in their twenties and thirties familiarise themselves with the sector.
However, hardly any young trustees – and only slightly more female board members – have been appointed since then.
Margot Scheltema, chair of the code’s monitoring committee, noted that some schemes didn’t see the urgency for change, according to FD, “although much research has highlighted the value of diversity for proper decision-making”.
Two-thirds of pension funds still have not appointed any trustees aged under 40, the newspaper reported, and less than 7% of the 1,600 board members in total are under 40.
In addition, almost 40% of pension funds lack a female board member.
Gerard Riemen, director of trade body PensioenFederatie, acknowledged the need for diversity for improved decision-making and support among participants.
However, he emphasised that pension funds had difficulties finding candidates and that any punishment for falling short of the desired diversity would come at the expense of the pension fund and its participants.
Riemen suggested that the organisations of employers, workers and pensioners, which supply the board candidates, should improve their efforts.
Semih Eski, chairman of the youth branch of union CNV, pension funds could also do more through offering work experience places. He highlighted the importance of support among young participants for a board if not all of its trustees were 50-plus.
FD quoted Ellen te Paske-Lievestro, a young trainee on the board of the €47bn metal scheme PME, who said younger participants often looked differently at things such as short supply in the housing market and the increasing number of self-employed workers.
Scheltema said she didn’t expect pension funds to meet Van Weyenberg’s deadline, as not enough board seats would become available. Instead, she suggested annually monitoring the number of board vacancies and establishing how often they are filled with a female or a younger trustee.
“Within three years, we should see a significant improvement,” she said.
See the original article from IPE’s sister magazine, Pensioen Pro, here (in Dutch).