The Netherlands’ new financial assessment framework (FTK) is facing yet another a setback as the Dutch Senate has postponed the reading of the bill, initially scheduled for next Monday.
The Upper House said it was unconvinced of the need of stricter rules within the FTK proposals and “demanded answers” from the Dutch government on a number of pension issues.
As a result of the expected delay, the scheduled introduction of the FTK on 1 January could be in jeopardy.
The Senate’s criticism of the FTK has caught many in the industry by surprise, as the Lower House has to date widely supported the bill, meant to protect the pensions system against market shocks.
But Joris Backer, a senator for the Liberal Democrats (D66), pointed out that, during a recent hearing on the subject, the Senate had been “taken aback” by the new FTK proposals.
Reflecting broad concern among pension funds and unions, Helma Kneppers-Heijnert, a senator for the Liberal Party (VVD), asked: “Are the proposed financial buffers really necessary? And will this all be feasible within European legislation?”
In their opinion, the proposed rules within the FTK are unnecessarily strict and would hurt pension fund participants and pensioners’ purchasing power.
Like many senators, Backer wondered why pension funds must discount their liabilities against a stricter rate than the one the EU has prescribed for insurers.
He also said he was unsure whether the FTK proposals would give pension funds enough space to create tailor-made policies.
The Dutch Pensions Federation said it was prepared to accept a delay in the introduction of the FTK, if the proposals were strengthened.
However, in this case, it will call for the implementation to be delayed, its spokesman said.
The Ministry for Social Affairs – responsible for the FTK bill – declined to comment.