NETHERLANDS - Collective pension funds are cheaper and deliver larger benefits than commercial pensions, according to a report by the VB, the Dutch Association of Industry-wide Pension Funds.
The self-employed, who cannot join a collective pension fund, pay around five times as much as employees - this is because insurers apply marketing costs and a profit mark-up to their customers.
The study found that in comparison to insurers, who deduct on average around 23.9% from paid pension premiums, almost half of this is for profit mark-ups, pension funds on average charge 4.4%.
The association, the Vereniging van Bedrijfstakpensioenfondsen, presented the findings today to Social Affairs minister Aart Jan de Geus during its annual member conference in The Hague.
Pension funds don't need to advertise for members or advise them about various schemes, as by law it is compulsory to save via a collective pension agreement.
Insurers protest, as they think that it is unfair competition: the commercial pension funds have marketing and sales costs, among which the fee for the commission agent.
Next to this, the VB report shows that not everyone profits in the same way from the collective schemes: "women profit more than men, people with a partner profit more than those without and those who enter a collective arrangement later in life profit more than those who start from a younger age," VB said.
De Geus wants to test if the compulsion is ‘Brussels-proof' according to Dutch financial newspaper Het Financieele Dagblad, hence there will be a study into the splitting of pension funds in a governing board and an implementing body, the paper said.