NETHERLANDS - The Dutch government came under fire from senior pension industry figures such as Roland van den Brink and Jean Frijns at a seminar organised by the Dutch central bank earlier this week.
Not only was the role of the new FTK (Financial Assessment Framework) seen as resulting in changes in the Dutch pension sector, but the role of the Dutch government as a trustworthy sponsor and regulator of the pension sector was put under scrutiny.
According to Roland van den Brink, director of investments at the Metalektro scheme, the new FTK will result in in-depth changes for the actuaries, based on the fact that most supervision aspects will have to be based on market value.
He stated that this will need a total renewed actuary approach, based on a reassessment of their own sector, changed schooling and take into account the increased interference of politicians the coming years.
He also addressed the changed relationship between actuaries and the pension funds or company, based on different rationales for future risks. He said the FTK would give actuaries a new and practical framework to take the market value approach.
He urged all parties to re-evaluate the current situation. Although the FTK would be positive in some ways it would also lead to a decline of in the schemes’ autonomy.
Due to the need for increased transparency and openness, there was a threat that third parties would increasingly meddle on a day-to-day basis.
And it was an unresolved question whether the FTK would be positive for the overall economy or financial status of schemes.
As an actuary, he also urged the sector to understand that it will be more feasible to be more focused on overall principles than to drown in immense new regulations – which could directly lead to lower investment yields.
Jean Frijns, head of ABP Investments, also had some critical comments, saying the government is not currently acting as a long-term sponsor.
He indicated that the Dutch government with its current stance and approach to future challenges is putting all the risks onto the funds themselves, without taking any preventative measures.
Frijns’ remarks were supported by the delegates.
In his response, DNB director Dirk Witteveen did not explicitly address Van den Brink and Frijns’ critical remarks.
He only stated that the overall pension agreements are based on a business contract formula and a so-called social contract.
He only deliberated on issues such as transparency, the need to inform the public about the real situation of the sector and to increase awareness of the increased risks for the continuation of the current pension system. Still, he agreed with Frijns that the government should keep to its perceived role as backup or sponsor of the Dutch pension sector.
The latter has been snowed under the last months, based on the fluctuating issues covered by the Hague. He urged the government to keep to its role as sponsor of regulations, supervision and financing.