NETHERLANDS - Implementation of the revised FTK framework for Dutch pension funds has been delayed by a year to 2015, according to the Jetta Klijnsma, state secretary for social affairs and labour.
A new FTK framework is necessary to implement the new pension contract agreed by the Dutch social partners as part of the Pensions Agreement, and an outline for the revised framework has already been developed under the previous social affairs minister, Henk Kamp.
According to this outline, legislation was to have been placed before parliament in early 2013 with an implementation date of 2014.
"I must inform you that the date is unfortunately no longer attainable," Klijnsma wrote in a letter to the country's lower house.
"The development of the new legislation is taking more time than was anticipated. The issue is highly complex and is an important topic which I wish to approach cautiously."
She added: "For this reason, I am assuming an introduction date for a new financial assessment framework of 1 January 2015. I aim to present legislation to the Lower House before the Christmas 2013 recess."
In a speech to the annual conference of the Pension Federation on Wednesday, Klijnsma said not much time had been lost. "We will start in January with a pilot introduction, which we hope to have concluded prior to the summer parliamentary recess," she said.
The pilot must result in a guide for pension funds, she added. "In the meantime, the supervisors - the DNB and the AFM - are working hard on a study into preparing for a transition pension contract."
The chairman of the Pension Federation, Kick van der Pol, called for clarity on the new FTK before summer next year, to give pension funds enough time to fine tune their plans. In his introduction, Van der Pol called for an FTK that can accommodate contracts with varying risk profiles and risk ambitions. He said the Pension Federation did not find either of the current options very attractive. These include an FTK for nominal contracts and one for real contracts.
"All funds certainly have the ambition to offer indexation again and to realise this they must take investment risks," said Van der Pol. "Most funds do not want to be forced to take risk out of their investment policies and then be unable to index for the next 15 years. Many funds also do not want to go in the other direction, with full indexation in a real contract with great uncertainty."
Pieter Omtzigt, a Christian Democrat parliamentarian and pensions specialist, said: "Additional uncertainty and lack of clarity is highly irresponsible."
The centrist D66 politician Steven van Weyenberg also expressed his concerns. "Certainty on pensions is urgently needed in order to restore people's trust. The current recession is mainly due to uncertainty and for this reason I don't want to delay any more. I want to get going!"
He added: "The cabinet did adjust the discount rate this year, which disadvantages working people. The state secretary is not now coming up with the second half of the package, to secure the pensions of younger generations."
Former DNB director Lex Hoogduin said he saw grounds in the delay to call for an adjustment, and said on Twitter that the decision to delay was "irresponsible".
Meanwhile, Peter Borgdorff, director of the large healthcare scheme PFZW, indicated
to be very disappointed about the postponement of the new FTK, "which will add much
"We appreciate that the issue is complicated, but we have been talking about a new
pensions contract for four years now," he said, stressing that the pensions sector needed to know whether the existing FTK, or the measures as announced by the new government in September, would apply during 2014.
"As it is becoming impossible for our participants to understand their pension arrangements, this delay is not contributing to the already waning confidence in the pensions sector," Borgdorff added.
In a further comment, the Pensions Federation said that it regretted the additional year of uncertainty.
It stressed the importance that all players involved keep on preparing for the changes with a continued sense of urgency.
In its opinion, pension funds that were already geared up for a transition to a new pensions contract should be enabled to go ahead without being hampered by the delay.
Henk Brouwer, chairman of the €274bn civil service scheme ABP added: "Because of the problems of the current pensions system, it is important that we keep the pressure on."
"We must use the delay to develop a proper contract," he added.