Dutch FTK delayed for pension funds
NETHERLANDS – The Dutch central bank has confirmed that the FTK, the new Financial Assessment Framework, will now be delayed by a year to January 1 2007.
“After discussion with the Ministry of Social Affairs, the Dutch Central Bank has decided that the FTK will become compulsory for pension funds as of January 1 2007,” De Nederlandsche Bank said in a statement.
The DNB said the current situation in parliament and the pension sector give “ample reason” to expect that the planned implementation in January 1 next year would “not be feasible”.
The announcement ends a period of uncertainty over the new framework, the Financieel Toetsingskader.
The implementation of the FTK for insurers was delayed in March this year, although the DNB had consistently said the framework would not be delayed for pension funds.
Last month the main Dutch opposition party the PvdA called for the FTK to be delayed for a year.
“We shouldn’t undermine in the short-term what we want in the long-term,” Jos Heuvelman, the DNB’s director of supervision, told IPE. “From now on the regulator will look through FTK glasses.” He added that premiums would have to be FTK-proof by the end of next year.
He added that there would be no change in the one-year recovery period for funds that were less than 105% funded. And deliberate underfunding was not an option.
“I want to impress that FTK is going to make one of the most important contributions to the good risk management of your funds,” said DNB director Dirk Witteveen in a speech today.
“We have over the past few months spoken to all parties concerned over a range of diverse options.
He said the DNB and the social affairs ministry are proponents of proper implementation. “It is therefore a good thing that something as fundamental as the FTK is a subject of parliamentary discussion.”
He acknowledged that the parliamentary debate has not yet been resolved.