Netherlands to stick with board models in governance legislation

NETHERLANDS – Jetta Klijnsma, the state secretary for the Dutch Social Affairs Ministry, has stood by proposals allowing five options for the composition of pension fund boards as part of new legislation on governance (PFG).

Defending her proposals in Parliament, she insisted that all five models – three variants of a single-tier board, external professional only and equal representation for employer, workers and pensioners – were practicable.

She also confirmed the government would stick with the 25% representation limit for pensioners to avoid the number of pensioners exceeding the number of active participants on the board of schemes with an "aged population".

Parliament is to get a final say on the matter next week, as it decided to adjourn Wednesday's debate, pending further clarification from the state secretary about the proposed rights of approval and advice of the various representative bodies of stakeholders.

If the new PFG legislation does not come into force by 1 July, the previously adopted 'Koşer Kaja Blok' initiative will apply temporarily, Klijnsma said.

The Koşer Kaja Blok initiative – named after the two MPs who tabled the proposal – allows for the representation of pensioners on pension fund boards.

Meanwhile, Klijnsma also announced that the government would unveil its long-awaited outline for a new financial assessment framework (FTK) by this summer.

The FTK, crucial for new pension contracts, is to take effect from 1 January 2015.

Paul Ulenbelt, MP for the Socialist Party (SP), criticised the proposed board model with external expert members and warned that the boards would be sourced from the "contaminated" financial sector.

He predicted pension funds would become "a grab bag for pocketing professional board members".

He argued that a single, simple board model, with the "natural" stakeholders of employer, workers and pensioners equally represented, would suffice.

To prevent assets from being used for non-pension purposes, Pieter Omtzigt, the influential pensions spokesman for the Christian Democrats (CDA), said either new stakeholder bodies should be given a right of approval, or liability for board members should be introduced.

He reminded Parliament of the hundreds of millions in pension assets from port workers, that have been shifted to cultural purposes, as well as to insurer Aegon, by the port workers' own pension fund-cum-provider, Optas.

Omtzigt further argued that ongoing talks on new governance legislation and the FTK did little to contribute to a stable and transparent pensions system.