Pension funds rally against need to report cooperation
NETHERLANDS - Representatives of the Dutch pension funds arena have lodged an appeal with the competition regulator NMa against a duty to report any cooperation
of activity between pension funds.
The duty to report, as laid down in the Competition Act, states that plans for the concentration of pension funds must be reported to the Netherlands Competition Authority (NMa), and it will then judge whether such a cooperation "seriously hampers local competition".
However, VB, Opf and UvB - the three pension bodies which collectively represent the pension fund industry - believe it is not possible to achieve an anti-competitive concentration of pension funds under the present pension legislation so they have challenged the rule.
"Pension funds in the Netherlands only carry out pension-related activities, resulting from arrangements between employers and employees," they stressed.
"Moreover, pension funds are not allowed to choose their market, as the Pension Act and additional regulation have strictly defined the territory of pension funds, including the domain of cooperating schemes."
One of the key issues these bodies object to is the administrative burden and financial costs of reporting, as they claim the cost is at least €15,000 per individual case - a disproportionately heavy burden against the theoretical need for a licence, suggest the pensions bodies.
"If supervision on concentration is applicable to pension funds at all, an exemption for pension schemes must be created," VB, Opf and UvB argued.
The three associations have asked the NMa to postpone the implementation of the disputed rule until the ministries of social and economic affairs have responded to their arguments.
The Dutch cabinet recently decided to allow company pension funds to merge their activities into a multi-pension scheme, in order to benefit from the highly necessary economies of scale, as small pension funds are increasingly struggling to meet the requirements of the Pension Act, in the area of governance in particular.
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