NETHERLANDS - The Netherlands Association of Company Pension Funds (OPF) is lobbying for pension reforms as the implementation of a new law will potentially double the financial reserve requirements of reinsured pension funds.

The OPF is holding meetings with the Dutch Central Bank (DNB) and the Ministry of Social Affairs over the coming weeks to try and reconsider their positions and persuade authorities the introduction of the nFTK regime on totally reinsured pension funds will essentially double the reserves they must hold because the current rules do not exempt them from meeting solvency requirements.

OPF says its interpretation of a report published by the DNB last month - called Implementation of the NFTK on totally reinsured pension funds - is the new pensions law indicates corporate pension funds face a double financial reserve issue, because even though a re-insurer is already required to conform to the financial rules regarding its solvability, the latter pension fund is also forced to keep a high level of financial reserves to counter possible negative results.

OPF points out the new specific regime is not applicable to pension funds who have only partly reinsured their assets but the liability-driven financial demand regulations are applicable to all corporate pension funds supervised by the DNB.

Frans Prins, director of OPF, told IPE the organization believes if a reinsurer has already put aside the necessary financial reserves to cover all potential solvency issues, the reinsured pension fund should not be forced to do the same.

At present, it is believed two corporate pension funds are being threatened by the extra burden but when asked by IPE, VB spokeswoman Gerda Smits said the issue was at present not relevant for the corporate-wide funds, according to their research.

Prins said his organisation will ask the DNB and politicians to use the upcoming discussions on the so-called ‘reparation-law' (Veegwet) to unwrap the extra reserve burden on the full reinsured funds.