The Dutch law on pension fund governance will dramatically alter the board structure of pension funds when it comes into force from this month (July 2014), giving pensioners a seat at the board table. “No board can currently gauge the impact. We have to find out when the time comes,” says José Meijer, vice-chair of ABP, the €309bn scheme for govenment workers and teachers. 

Under the new set up, pensioners will make up a quarter of the 12-strong ABP board. In addition, there will be a powerful supervisory board (RvT), empowered to sack board members. The current participation structure for members – consisting of three organs – is to be merged into a single new accountability body (VO).

Moreover, ABP participants and pensioners have, for the first time ever, had a say in the make up of the 48-seat accountability body. “Employers and workers will have 16 and 19 representatives respectively, while pensioners will take up 13 seats. “This won’t be a one-off. From now on, we will do this every four years,” Meijer says.

The election took place online and by phone from 11-28 March. Over 84,000 votes elected 19 active members and 13 pensioners to the VO, from a total of 236 candidates. 

Other pension funds are also improving their democratic structure, but  on a modest scale. The healthcare fund PFZW is organising the election of a single pensioner on its board. Participants of the €50bn metal scheme PMT can elect two pensioners.


ABP put a lot of effort into its polls, Meijer says. “Candidates varied in age from 22 to 82, and were divided among 18 voting lists, with more than 2.3m potential voters.”

This is not without pitfalls. “The large number of voters is our biggest worry. How do you encourage all these people to vote? Regrettably, people are not desperate to get actively involved with their pension. To the average participant, the VO is a far-away event.”

ABP had hoped for a 15% turn out, according to Meijer. In the event, turnout was under 4%.

PMT – the third largest pension fund in the Netherlands – has approximately 190,000 pensioners but only 14,511 cast their votes for representatives on the board. PME, with 165,000 pensioners, is to appoint two pensioners as non-executive board members after it decided to forgo elections because of the absence of other candidates.

ABP has a clients’ panel, and more than 50% of its members indicated that they would cast their vote.


The process of democratising is a two-edged sword. Candidates who have been elected on a majority vote enjoy considerable legitimacy, but this may come under pressure given the low turnout. Why has ABP opted for this route anyway? “In part, because we think this legitimacy is important. It won’t be limited to the VO, but also reflects on the board, as the pensioners’ representatives in the VO nominate the three pensioners’ candidates for the board.”

However, it is also a pre-emptive strike. “This is a result of a less well-known passage in the Governance Act, which stipulates that participants can enforce a VO election if they can gather more than 500 signatures,” Meijer points out.

“We know our participants, and we have no doubt that they would have taken up the legal opportunity. So we haven’t waited for those signatures, and grabbed the initiative for the election ourselves.”

Meijer is looking forward to one ‘sound’ and relatively compact committee, to replace the current complicated 72-strong co-decision-making structure, divided among a participants’ council, employers council and the old-style accountability body. She stresses that the new VO will improve the efficiency of co-decision making. “We believe in co-decision making. If we properly discuss issues with our VO, we expect that we can produce more mature and better proposals.”

Equal representation

It is no coincidence that employers are also represented in the VO. “In our opinion, a pension is a labour condition. It is matter of deferred salary, which is a competence of the social partners. We want this to be reflected in ABP’s board structure, including the VO,” Meijer says.

The pension fund wants to retain the role of its social partners. To this end, it has opted to keep its board model of equal representation. The new obligation to have pensioners on the board, is at odds with this principle. “Moreover, it triggers tricky questions, such as having younger workers on the board. And once things are tilting, don’t we also need to allocate seats to women, labour-disabled and other lobby groups? It is a difficult issue, for which the new governance legislation doesn’t provide answers,” she says.

Governance focus: Pensioenfonds Metalektro

A deep-rooted sense of solidarity and justice drives him, explains Jaap Janissen, who has been chairman of the participants council of Pensioenfonds Metalektro (PME) since the body was set up 13 years ago. Janissen is now seeking appointment to the new-style accountability body (VO), which is set to replace the participants’ council on 1 July.

Jaap Janissen
• 2001-2014 Chairman of the participants council
• Pensioenfonds Metalektro, the Netherlands
• Assets: €32bn

During his career as a labourer in the metal sector, Janissen, 78, became a social activist. From his home in Amsterdam – purpose-built for metal workers in the 1960s – he supported strikers who fought for their employment when the metal industry declined. For a 23-year period he chaired a committee which focused on employment issues. “Since then, I have considered myself a Communist,” he says.

Janissen was also chairman of several workers’ councils at the eight companies he worked for during his 30 year career. He was dismissed twice because of his role as chairman. “In those days this was still possible,” he recalls.

It is not surprising that he has been a member of the FNV labour union and its predecessors for almost all his working life. Initially he was a member of the communist union EVC. “But this was a bit scary,” he noted. “They were too dogmatic, and their sole aim was to organise industrial action for pay increases. They were hardly up for consultation.”

Janissen’s interest in pensions started late in life. “A year before my retirement I was asked to take a seat in the participants’ council.” Following the credo that you cannot only take in life, he agreed and started straight away as chairman. “I took it seriously as co-decision making means as much as you make out of it.”

Nowadays, PME’s participants’ council has its own independent newsletter for its 300,000 participants, and members enjoy additional education four times a year. “To be taken seriously, we want to be a proper sparring partner for our board,” says Janissen. 

PME’s participants’ council also took the initiative for a nationwide platform of participants’ councils of industry-wide pension funds. Janissen has been chairman of this body – with 80 members, representing 4m participants – for three years.

Thanks to his long career in the metal sector, Janissen was able to take early retirement at 60 on a full pension of 70% of his final salary. He thinks he is lucky, and that pensioners should not whine, considering the pensions perspectives of current workers.

In Janissen’s opinion, ‘indecisive’ politicians are to blame for the current inter-generational discussion about the fairness of the current pension system. “We have been talking about a new pensions contract for six years, and we still don’t have clarity about an affordable pension for younger workers or certainty for older workers,” he says. “Rather than looking for common ground, politicians give in to their rank and file too much and are trying to get the best deals for themselves.”

Pension funds are to blame for the mess as well, according to the social activist. “Their communication has been insufficient, and they still use too many English words or jargon. This is not the way to reach workers.  For example, who understands the meaning of a word like ‘franchise’?”

Janissen also chides the lack of transparency of asset management costs, fearing that insufficient investment returns are available for pensions. “But we are on the right track,” he concedes.

He thinks the retirement age for Dutch workers should not be raised higher than 67. “Companies should develop a policy for older workers. By deploying their available holidays, they can employ over-50s four days a week. That would be a much better way to actually keep them working until 67,” he argues.

He also has a suggestion for better pensions accrual for younger workers, including those in the metal sector. “If the employers abandon the lowest salaries, young workers’ income would exceed the threshold above which they can start accruing a pension. This would also make the industry more attractive to young and educated staff.”

As far as Janissen is concerned, he will continue for a while spending his energy on co-decision making: “Until the moment I am set in my habits and can’t inspire people any longer.”

On the one hand there is a worry that pensioner-trustees will act as a separate faction within the board. “We don’t want to contemplate this, as we don’t know the possible consequences,” Meijer says, adding that there is a concern that other groups might feel under-represented. “ABP thinks that it should take the initiative, and start talking with younger workers, for example.”

Given the variables, the board has decided to evaluate the structure after two years. “By then, things will hopefully have quietened down. Then we can assess whether we have made the right choices, and what changes might be needed.”

For the time being, the pension fund needs all its capacity to implement the current governance changes. According to Meijer, the changes are being carried out on a tight schedule, but not as quickly as the supervisor, De Nederlandsche Bank (DNB), would prefer. The DNB originally wanted appointments to all new governance bodies and changes to pension funds’ articles of association to be submitted before 1 April so it would be able to meet its assessment deadline of 1 July. ABP did not achieve this, Meijer confirms. 

The three board members who are to be replaced with pensioners might stay on a little longer. However, ABP has not yet published the names of the departing board members – although it has indicated that they are two employees’ representatives and one  employers’ representative. 

Once the accountability body and the RvT have been manned, and the three pensioners appointed, the board will undergo an interim evaluation, Meijer anticipates: “We need to look each other properly into the eyes, and discuss what we expect of each other. Only after we have started together will the impact of the new governance legislation on the functioning of the board become completely clear.”