The Dutch pensions watchdog, De Nederlandsche Bank (DNB), has encouraged 60 potentially vulnerable pension funds to “reconsider” their future as independent organisations, according to Jan-Jaap Dahmeijer, supervisor at the regulator.
Speaking at a recent seminar in Amsterdam held by asset manager F&C on the future of the Dutch system, Dahmeijer said the DNB selected the 60 pension funds in question – with assets ranging between €50m and €2bn – based on criteria such as costs, participants’ average age and the ability to affect funding through contribution changes.
He told IPE the DNB had conduced more thourough meetings with about five individual pension funds in the meantime, in order to provide tailor-made advice.
He said the regulator had encouraged the pension funds to prepare for possible consolidation, but he stressed that any decision on the matter would ultimately be up to the schemes’ boards.
He also stressed that further consolidation was not one of the DNB’s goals.
“What matters is that things work,” he said. “A large pension fund is not a guarantee for this.”
Dahmeijer estimated that the number of pension funds in the Netherlands was set to fall from more than 300 to approximately 250 within a year.
He said he was convinced the consolidation process would continue, and that it would affect all players involved in the industry, such as accountants and pension providers.
According to the supervisor, insurers are growing more reluctant to conclude new contracts, while the duration of their quotes is decreasing, and some are even starting to withdraw from the market.
“The changes might be even bigger than we are currently aware of,” he said.
Dahmeijer also noted that pension funds’ boards hardly seemed to be planning to change their pension arrangements from defined benefit to defined contribution.
“I don’t expect DB will have disappeared by 2020,” he said.