NETHERLANDS - The decision on the minimum age workers can join a pension fund should not be set in law, but be left to the respective sectors, says the VB.
“Sticking to a minimum age has negative consequences for e.g. the catering and cleaning industry and retail sector, which will face extra administrative costs and burdening information obligations,” VB, the Dutch Association of Industry-wide Pension Funds, says in a position paper on the new Pensions Bill.
“If a minimum age is inevitable, it should connect to an existing national standard, e.g. the 23 years of the minimum wages,” VB added. Social Affairs minister Aart Jan de Geus currently proposes that company schemes aren’t allowed to set an entrance age of over 21. At present, the maximum age of joining a company fund is 25.
While de Geus wants to introduce the Authority Financial Markets, or AFM, as an additional supervisor on communication, VB still insists on DNB remaining the only pensions watchdog.
“Both regulators have their own reference framework, which won’t work in situations of open standards – our preference – in stead of detailed legislation,” it explained.
VB reiterated its plea in favour of a longer recovery period than one year, in case a pension fund’s coverage ratio drops below 105%. “A one-year period has certainly cyclical effects and therefore macro-economic effects,” it stressed.
“Moreover, the one-year period will lead to a reluctant investment policy, which will hamper an optimal performance.”
In the VB’s opinion, the rules for the mandatory communication to members are too detailed. “Pension providers should check their information on clarity with their members in advance,” it said.
Because of the Pensions Bill will cause industry-wide schemes to drastically adjust their documents, processes and systems, a careful legislation is more important than a quick reading in parliament, VB indicated.
“In the concept of the introductory legislation, some clauses come into force immediately, and others after one year. In order to be able to properly judge the impact, parliament should get ample time.”
VB is the umbrella of 86 industry-wide schemes. Together they represent 75% of the participants in collective schemes. Their invested assets total €400bn.