NETHERLANDS – Pension fund trustee boards in the Netherlands should be more open to taking the conclusions of internal supervision to heart, while the quality of visitation reports must also be improved.

This was the main message the Dutch pension fund supervisor, De Nederlandsche bank (DNB), recently stressed at a seminar for smaller and mid-size schemes.

According to a study conducted by the DNB, trustee boards often fail to be sufficiently proactive towards visitation committees.

The study also concluded that reports prepared by such committees too often offer mere observations, rather than "setting normative standards".

In addition, the DNB notes that the quality of the visitation process tends to vary, and that there have been cases of "bad practices".

Based on a sample study of 24 schemes, the supervisor also has found that the financing of so-called 'VPL schemes' was insufficiently fenced off from the main scheme.

The DNB further warns that many schemes will likely fail to meet the international standards for euro-denominated payments by February 2014, the deadline for compliance.

The supervisor noted that schemes closed to new members were insufficiently aware of the risks specific to their situation.

As the discussion turned to the new pension contract the Dutch have been trying to hammer out in recent years, Hans Veltman, vice-chairman of the TNO pension scheme, argued that pension fund trustee boards should be "in the director's seat" when it comes to discussions with stakeholders, as trustee boards generally have the best understanding of the issues.

Betty Mulder, trustee at the Deutsche Bank corporate pension scheme, advised delegates to take sufficient time for those discussions.

"More calculations lead to more possibilities, which in turn lead to evermore different opinions," she said.   

She added that her pension fund was inclined to stick with the present nominal arrangement because the different options of a new arrangement posed difficulties in terms of communication with plan members.

Mulder pointed out that scheme members responded negatively to the issue of subjecting past accrued rights to a new regime, and lacked understanding of why there should be a choice between two different arrangements.

The fact the regulator has still not presented a final draft of the new supervisory regime is another obstacle that stands in the way of revising the pension arrangement, she added, as is the division of responsibilities between employer and board of trustees.