Dutch schemes at risk of applying conduct code too hastily – Towers Watson
Dutch pension funds are in such a hurry to implement their new code of conduct they run the risk of implementing it incorrectly, Towers Watson has warned.
Speaking at the Euroforum congress in Amsterdam, Paul de Koning, senior consultant for compliance and governance at Towers Watson, cited the many and often changing rules as the biggest challenge facing pension funds’ boards.
“They think they can never finish the job,” he said.
Introduced on 1 January, the Pension Fund Code – initiated by the Pensions Federation and the Labour Foundation (StAr) – consists of more than 80 rules.
Margot Scheltema, chairman of the new monitoring committee for the Code, added: “Applying the code is an evolving process, and it could take a couple of years before we have a proper picture.”
She said the code could be “compressed” whilst conceding that pension funds’ interpretation of its open norms could cause problems in future.
Scheltema added that the new committee did not yet have a clear picture exactly how the monitoring process of more than 350 pension funds would be carried out.
Separately at the congress, the Association of Internal Supervisors in the Pensions Sector (VITP) – established in 2012 – presented its new code.
The VITP Supervisory Code is meant to serve as a “moral compass” for the association’s 135 members, explained Erik Klijn, a board member at VITP.
He said the code’s application was not mandatory, but that VITP expected its members to apply its norms framework.
Klijn described the supervisory code as a “work in progress”, which would continue to evolve as experience was gained.