The Dutch Pensions Federation has criticised a proposed remuneration increase for the professional board members of pension funds in the Netherlands.
Gerard Riemen, director at the lobbying organisation, said: “A modest reward policy is a great good in the sector.”
He said the industry was focusing on the interest of society and that pension funds should not operate as commercial businesses.
“We want to radiate this focus within the existing culture, as well as within pension funds’ remuneration policy,” he said.
Riemen’s comments came in response to professional trustee René van de Kieft, who recently argued in news daily Financieele Dagblad that increasing expertise on schemes’ boards would require a similar increase in remuneration.
In Van de Kieft’s opinion, the relatively low reward for trustees made attracting more expertise more difficult.
He noted that the Dutch pensions sector was the only industry that paid board members less than their staff and the highest echelons of their providers.
Van de Kieft is board member at the €309bn civil service scheme ABP and the €6.3bn pension fund PostNL. Until recently, he also was a trustee for the €34.4bn metal scheme PME.
According to Riemen, the legal rules concerning the amount of time board members must spent on their responsibilities are the real problem.
The Federation also disagreed with Van de Kieft’s suggestion that a board consisting of only social-partner representatives would be inferior.
“The sector can work very well with the choice of board models, and this also goes for the reward of trustees, for which the Federation has issued guidelines,” he said.
The recommended standard pay for a full-time board position varies from €100,000 at a small pension fund to €140,000 at a large scheme.
However, trustees’ remuneration at the largest providers APG and PGGM varies from €450,000 to €670,000, according to the FD.
Meanwhile, ABP has indicated that Van de Kieft, who represents union federation CNV on its board, has not spoken on behalf of ABP.
“We want to keep trustees’ remuneration manageble and predictable,” it said.
“Therefore, we have opted for a fixed reward [that approximates] the recommendations of the Pensions Federation.”