NETHERLANDS - The umbrella organisations for pension funds and insurers and the Labour Foundation (STAR) have accused Social Affairs' minister Piet Hein Donner of being in too much of a hurry to develop the indexation label.
In a letter sent on behalf of all parties, STAR has asked Donner to reactivate the consultation process to further pinpoint the present concept design.
The indexation label - prescribed by the new Pensions Act - is supposed to provide pensioners and the participants of pension schemes with a clear picture of the quality of the indexation by their pension providers.
"The indexation label must be solid, and a delay is acceptable if it leads to a better design," Willem J. Kroes, deputy secretary of the STAR stressed.
According to STAR, a review of the design not only with ‘consumers', but also with pension providers, is crucial, to ensure the label meets the underlying aim.
More specifically, the proposed categories for indexation targets need further refinement in order to stay in line with practice, STAR said.
"One category in the present concept covers three-quarters of all participants, and that seems quite crude to us," Kroes explained.
"Furthermore, we must ensure participants do not become confused by the indexation quality and the quality of a pension scheme itself," he continued.
"The development of a proper indexation label should not be underestimated, and we must only continue if it leads to the right results," Frans Prins, director of the Foundation of Company Pension Funds (OPF) added.
According to the OPF, more clarity is needed to accounting tools about the risks and average expectations on indexation. Moreover, the indexation label must not affect the reporting rules for pension funds and companies, the body said in its latest magazine.
Initial proposals to introduce the indexation label on 1 January 2008 have already been revised as the minister recently announced the quality sign will now be operational from January 1 2009.