NETHERLANDS - A general pensions vehicle (API) aimed at defined contribution schemes is not an adequate response to the problems in the pensions sector, according to the pension representative body OPF.
"There is no need for a simplified API ahead of a full API, as the government is now considering," said Frans Prins, director of the Foundation for Company Pension Funds (OPF).
The government has started a consultation among stakeholders on a ‘premium pension institution' (PPI) as the first phase of the API.
The PPI will focus on ‘pure contribution schemes' without any insurance risk, and will be entitled to the same tax exemption as pension funds, the the finance ministry stated on its website.
The Treasury describes the PPI as a relatively simple vehicle that can operate effectively and transparently in the European market, because it meets the minimum requirements of pensions Directive IORP.
But "the proposed set-up is not of much use to us, since it does not address the issue of the required scaling up of domestic schemes, nor does it provide solutions for cross-border schemes", Prins explained.
The OPF has urged the government to develop legislation which allows small company pension funds to work together in order to keep costs under control.
"As things are now, we would prefer adjustment of the Pension Act rather than the API route," Prins added.
Finance minister Piet Donner has made clear he intends to send the bill for the ‘API lite' to parliament this summer.
"However, worryingly, the minister has not provided an indication, for the moment, to suggest an API for defined benefit schemes will have been developed," the OPF said.
Prins said the three pensions representative bodies will present a joint position on the API light shortly.
Earlier this month, George Moller, chief executive of Robeco, the asset manager urged the government to maintain momentum with developing the API.
"For cross-border schemes, we must for example be able to offer arrangements such as guarantee schemes. If it does not get any further than an ‘API lite', our competition will be in a better position," he stated.