NETHERLANDS – Dutch pension funds must explain that the concept of solidarity also means the redistribution of pension benefits, in order to tell participants the "fair story", according to communications watchdog AFM.

In a speech at a pensions seminar organised by fellow regulator De Nederlandsche Bank (DNB), AFM board member Harman Korte said schemes must also make clear the risk that the target for a real pension might not always be achieved – and could even be "adjusted downward" over time.

According to Korte, the "fair story" should contain more information than the uniform pensions statement (UPO), and clarify the effects of inflation and uncertainty, as well as indicate current pension rights and those yet to be accrued.

He said the AFM would increase its focus on new communications instruments, such as interactive 'pensions dashboards', providing insight into a participant's pension accrual and lending advice when that accrual is found wanting.

Korte also called for a "quality indicator" for the most important elements of a pensions plan, including uncertainty over returns.

He stressed that pension funds could do more to advise their participants before coming up against "legal buffers".

The only limit, he said, was that they were prohibited from recommending specific financial products, or acting as an intermediary.