NETHERLANDS - Regional differences in pension supervision should not encourage Dutch schemes to move to other EU countries soon, according to social affairs' minister Piet Hein Donner.
But the Netherlands will look into the desirability of a further harmonisation of supervision, the minister replied to questions from Christian democrat parliamentarian and pensions specialist, Pieter Omtzigt. This would depend on the results of an evaluation of the EU pensions directive.
Donner stressed that to get a proper picture of current pros and cons in supervision, the total package of valuation base, assumptions and additional security mechanisms needs to be considered.
"The Dutch set-up might seem expensive, because the solvency levy is included in the contributions. But there are no expenses for a guarantee fund, and sponsors don't have to pay extra in case of a shortfall," the minister pointed out.
"Contrary to some countries who have made indexation mandatory, the Dutch reservation requirements only apply to nominal liabilities. And returns on own assets of Dutch schemes, contribute to indexation quality and stability of premiums," he added.
Donner underlined that all EU members are bound to the directive's minimum solvability requirements, such as a funding ratio of 105%.
According to the minister, the new Belgian pensions legislation might put pressure on companies, because they can be forced to pay extra, in case of a shortfall of their pensions scheme. The Belgian supervisor CBFA can demand an adjusted finance plan which establishes the contributions of the sponsoring companies, he indicated.
Earlier, director of supervision of the of the Dutch pensions regulator DNB, Klaas Knot, said that he has picked up signs of Dutch schemes considering transfering their operations to Belgium, because of its more relaxed regulations.
"The DNB is putting pressure on fellow-regulators within the EU for harmonisation of European pensions supervision. This supervision arbitrage is not in the interest of participants in pension schemes or other member states," Knot stated.
At the moment, the Committee of European Insurance and Occupational Pension Supervisors (CEIOPS) is evaluating the initial implementation of the pensions directive, in order to report to the European Commission, its secretary-general Alberto Corinti told IPE. CEIOPS' conclusions are due at the end of the year, he said.
According to Corinti, CEIOPS could issue best practice standards, as a second step in the evaluation. "But the matter can only be properly solved by EU law," he stressed.
Meanwhile, Omtzigt has asked the Social Affairs' minister for a debate on the issue. "I would like him to explain how safe Dutch pensions will be under a Belgian system. So far, Donner has not responded to the fact that Belgian legislation allows for flexible discount rate instead of the market rate prescribed to Dutch law. Neither has he said anything about the Belgian option, that company schemes can pool their assets while remaining independent."
"I wouldn't like to see €750bn of pension assets, together with all of its employment and expertise, leave the Netherlands. Once they have gone, they won't return."