Entity change subject to DNB approval - Donner
NETHERLANDS - The transition of a pension fund foundation into another entity will become subject to approval of the pensions regulator DNB, social affairs' minister Piet Hein Donner has confirmed.
New rules will be written to change the Pensions Act, the minister said in answers to questions from Pieter Omtzigt, Christian Democrat MP, and his colleague Mariette Hamer, of labour party PvdA.
Their questions relate to a row concerning the takeover of life insurer and group pension specialist Optas by Aegon as in the wake of this €1.3bn transaction, it was found assets from the harbour workers' pension fund - managed by Optas Foundation - would be used for an art subsidy.
According to Donner, a pensions provider - either as pension fund or insurer - is the legal owner of pension assets. However, for spending the money, the owner has to take all the legal requirements of the Pensions Act, as well as the pension contract and the providing contract, into account.
That said, there is flexibility on who pays for and who profits from financial buffers, the minister said.
"This flexibility makes it easier to shape solidarity within a pension scheme, and increases employers' involvement," he added.
Because the Pensions Act allows contract partners a considerable margin on decisions about the size and destination of extra buffers, sponsoring companies are willing to pay extra contribution in case of a shortfall at their schemes, if they also can expect extra reserves to be paid back or lowered contributions during better times, Donner explained.
If a scheme is delivered by an insurer, all players - including employers and workers - must agree with a destination change of contributions, such as on indexation or built-up pension claims.
A pension fund's assets can only be used according to the scheme's goals - which can be different from scheme to scheme - while the destination of extra buffers is determined by the pensions contract, the minister further pointed out.
In Donner's opinion, reserved assets (‘beklemd vermogen') of a former pension fund foundation must still be used for its initial intention, after the transition into another entity.
"Depending on the goal of the initial foundation's articles of association, it could mean that the ‘beklemd vermogen' is exempt from being used for indexation of benefits but, for example, can also be used as a buffer for pension claims."
However, according to the minister, the owner of ‘beklemd vermogen' can ask the court to cancel the constriction.
Donner deliberately did not mention the Optas case, because a Rotterdam court is looking at the issue at the request of the association for the pensions of the transport and harbour companies (BPVH) at the moment, he made clear.
The pension funds' lobby organisations VB, OPF and UvB, last month stressed they believe pension funds are the only owners of pension assets. According to the bodies, legislation is required to prevent pension assets from draining away in the event of a merger, transformation of pension provider or liquidation.
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