The Dutch pension fund of US pharmaceutical company Johnson & Johnson has finally completed its transfer to Belgium after a three-year process.

According to Wijnand de Valk, the scheme’s chairman, Dutch supervisor De Nederlandsche Bank (DNB) has also agreed to transfer existing pension rights, and the pension fund is now fully subject to Belgian legislation, according to Dutch financial daily Het Financieele Dagblad (FD).

“It was not a simple task,” the FD quoted DeValk as saying. “There was a lot of distrust among participants, and the process required much time and consultation.”

Dutch pension funds’ interest in the Belgium option is increasing, as multinational companies tire of the extensive regulatory pressure in the Netherlands, and seek to increase efficiency by combining Dutch and Belgian schemes, and possibly those in other countries as well.

Last year, risk adviser Aon and two other international firms announced their intention to move their pension funds to Belgium.

However, Aon has not yet taken a final decision, as its announcement raised concerns among its public and its sheme’s participants, with a number of them establishing a stakeholders association, according to the FD.

It quoted René Mandos, chairman at the scheme, as saying: “Some mistakenly fear supervision in Belgium is inadequate. Belgium still is the best option, and that’s why the company is busy consulting all stakeholders. Because it is a complicated process, it requires a lot of fine-tuning, and therefore takes a lot of time.”

At Johnson & Johnson, the biggest stumbling block was to get the support of all participants, De Valk said.

“Initially, people were very distrustful,” he added. ”The process required meticulous implementation.”

According to De Valk, pensions under Belgian rules are “better for everybody”.

“The strict governance requirements made it difficult for our small pension fund to stay in the Netherlands, as the trustees had to set aside a disproportionate amount of time,” he said. 

“Participants now have the benefit that rights cuts are not possible, as the employer must fill in any shortfall.”

In Belgium, capital requirements are less strict, and discount rates for liabilities are higher than in the Netherlands.

Countering criticism that Dutch pension funds chiefly want to move south because of the “lighter” regime, De Valk took pains to explain that his pension fund discounted liabilities in Belgium against the same rate as in the Netherlands.