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PGGM’s Munsters says funds stressed by changes

NETHERLANDS – Roderick Munsters, chief investment officer of the second-largest Dutch pension fund, PGGM, has said Dutch pension funds are “getting stressed” by the changes to the system.

“They are getting stressed about the continuing stream of changes to the Dutch pension system,” he told a forum organised by the Catholic University of Tilburg.

He said it seemed the government has not yet a set strategy or policy for the sector. “The new proposals are contradictory to the need for pension funds to develop a long-term strategy. The Dutch pension funds have a real problem with the new policy proposals.”

This view has been echoed by John Neervens, chairman of the largest Dutch pension fund, the civil service scheme Stichting Pensioenfonds ABP. He has been quoted by Dutch newspapers as saying the scheme is totally against the new proposals.

Neervens was quoted saying the new proposals mean there is a hidden agenda being implemented by the current government to change the Dutch pension system, which is based on a solidarity principle.

Munsters, when asked by journalists, stated that he does not think there is a hidden agenda, but he reiterated that the current proposals would have very negative effects on the sector in future.

Munsters proposed that pension funds would have to become more pro-active in the way they express their views on possible changes. He also stated that future threats will not come from Dutch government proposals but will largely be based on EU directives or the European pension fund sector itself.

In his speech, Munsters indicated that there are only a few EU countries which have a sufficient pension system in place. Most EU countries will have to cope with increased ageing, without enough pension fund savings. Potential inflationary pressures, coming from this development, will not only pressure the euro but also negate part of funds’ investment portfolios.

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