Dutch pension fund associations have expressed doubts over new proposals aimed at limiting pension funds’ secondary activities.
The government-sponsored Staatsen Commission had proposed a 20% limit on Dutch pension funds’ investment in other companies. Beyond that point funds would have to notify the pension and insurance industry regulator, the Pensioen- & Verzekeringskamer.
“We say that’s not a good idea,” said Peter Borgdorff, director of the Dutch Association of Industry-wide Pension Funds, the Vereniging van Bedrijfstakpensioenfondsen or VB.
“We have a prudent person principle in investments, so why should they make it more difficult?” he says. He gives the example of real estate, where a pension fund could be the only investor.
That view was borne out by Jeroen Steenvoorden, director of the Corporate Pension Funds Association, the Stichting voor Ondernemingspensioenfondsen, or OPF. He said that such demands were new in Dutch legislation. He sees a “grey area” between entrepreneurship and investment.
He adds that there is a new tax proposal for next year on the table under which pension funds may face corporate taxation. He says the OPF was lobbying, saying that MPs should at least wait until the Staasten report has been discussed.
“We still have to make up our minds about our strategy,” Steenvoorden adds, though he was confident there will be changes to the report along the way. Steenvoorden says the OPF is now taking time to discuss the report with investment directors at pension funds.
Steenvoorden admits the rationale behind the proposals is logical in that pension funds shouldn’t be allowed to compete with other institutions that don’t have access to the same funds. And the other issue is member protection.
The report has now been sent by social security minister Mark Rutte to Parliament and the Labour Foundation consultative body for a two-month review period. The cabinet is expected to make its views known in mid-February next year.
The commission was set up by the first Balkenende cabinet and comprised Jos Staasten of Amsterdam-based consulting firm Boer & Croon, Allen & Overy partner Steven Schuit and PVK chairman Dirk Witteveen.
When the commission was set up the VB said that “erroneous ideas” should not be allowed to constrain new activities. It acknowledged that pension funds should focus on providing protection. “Activities should be undertaken in compliance with the rules applying to other providers of similar products,” it says.

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