NETHERLANDS - Dutch social affairs minister Henk Kamp has said he intends to allow pension providers to link their financial products to their affiliated, mandatory industry-wide pension funds.
In a letter to parliament, he announced a bill that would allow providers to indicate this connection to institutional players, but would maintain the ban on mentioning the link to consumers.
The proposed legal change is meant to provide pension funds' subsidiaries with the opportunity to market themselves, while insurers are offered a more level playing field, the minister said.
So far, pension funds' own providers are not allowed to link their products with their scheme because insurers consider pension funds promoting their subsidiaries as unfair competition.
In Kamp's opinion, the present ban hampers commercial opportunities for the affiliated providers, while demand for third-pillar products is growing, following the increase of average salary plans and defined contribution arrangements.
However, pension funds should no longer be allowed to mention their own provider in communications with participants or affiliated employers, not even in the uniform pension statement (UPO), according to the minister.
He also wants to prohibit pension funds from transferring their names to a new subsidiary/provider, as healthcare scheme PFZW has done with its initial name PGGM.
Diana Abrahams, spokeswoman at PGGM, said the proposed rules did not increase transparent communication for pension funds' participants.
"A different sender could make the participants of our five clients believe they are suddenly with another pension fund, and that can cause confusion," she said, adding that "some PFZW-participants like to know which company is implementing their pension plan".
Separately, Kamp has said he also wants to temporarily limit transfers of pension value for workers changing jobs to protect small employers against too large additional payments.
In a letter to parliament, he recommended abolishing the current right of value transfer if an employer is facing serious financial problems because of an additional payment.
The minister said he would in the meanwhile seek a structural solution to the issue.
He said a temporarily alternative could be maximising an additional payment. In his opinion, the effects of the first alternative are less dramatic, but the implementation will probably be more complicated than the second option.
The minister said he wanted to elaborate both alternatives with the pension providers and the social partners of employers and employees, adding that he would like to introduce the new measures on 1 January 2012.