At a time when the Dutch pension sector is still trying to assess the changes presented by its supervisor the Dutch Central Bank (DNB) and the minister of social affairs, pension funds, insurers and independent consultants are setting up new organisations that can cope with the imminent storm of news, rules and directives the coming years.
Leading pension funds, such as ABP and PGGM, have already combined their knowledge with several insurers and universities to form research networks such as Netspar. Netspar has already made an impact, but largely in relation to issues proposed by the pension funds themselves. Consultants, independents and intermediaries have, however, still to deal with an informal network of groups and organisations.
However, a new star could be emerging on the horizon if statements made by the officials of the Kring van Pensioen-Specialisten/Circle of Pension Specialists (KPS) harden into action. The KPS could become a new knowledge centre in the Dutch pension sector, not only focusing on purely pension fund related issues but also targeting possible requirements coming from its own members.
Pierre Akkermans, chairman of KPS, believes that KPS should become a force to reckon with in a sector still in flux. The main points of discussion will not only be related to pending issues, related to the implementation of the Pension Law, new supervision and accountancy rules, but increasingly to the possible certification of pension arrangement providers in the sector.
KPS was set up in 1991, and formalised at the end of 1992. According to the organisation, the main objectives are to promote the practical application of research on the territory of pensions; to look after the common (occupation) interests of the participants, to service pension expertise and science; to promote the exchange of experience, knowledge and information as well as education for the participants and for people outside the circle, and to promote mutual relations and solidarity for its participants.
KPS has a wide range of members, which support the multi-disciplinary character of the sector. The management of KPS is being done by Bureau D&O in Hoevelaken.
Possible participants are being screened by a ballot committee, which decides whether the respective applicant has the right background and knowledge to become a member. However, KPS has no intention of creating elitist barriers, says Akkermans. Although the acceptance committee sets the barrier high for applicants, the organisation is open for all.
The rationale for KPS’s strict adherence to its own rules is that it wants to become a major knowledge centre. When it was set up KPS had a broader approach to its objectives. However, because of ongoing changes in the pensions sector, and increased demand from KPS members to address the present and future threats to the Dutch pension sector, the main goal has become the attainment and disbursement of knowledge to its members.
Akkermans has been chairman of the KPS since February last year. He took over from Joop Rietmulder, who had been chairman since 1991. In addition to the KPS chairmanship, Akkermans is also partner at Deloitte Actuaries and Pension Consultancy.
Max Bogaard has been director of the KPS since January 2004 and is also director of the European network European Actuarial & Consultancy Services (EURACS).
Akkermans says he became involved in KPS because it is actively concerned with the ongoing restructuring of the Dutch pension sector. The main task of the KPS at present is to inform policy makers and journalists about the potential results of imminent or proposed changes.
Unlike other sub-sector organisations, the KPS has not become a lobbying organisation, he says. “Our organisation gives its opinion without any relation to a specific part of the pension sector as a whole.“
KPS has witnessed unexpected growth since 2004, from 250 members to around 310. Although the increase is welcome, KPS does not intend to become too large, says Bogaard, since it wants to remain a flexible and personal organisation.
The increase in membership has changed the organisation structurally. During the past two years, the majority of new applicants have been younger than 45, and almost half have been women. This has not only provided new blood but has also changed the perspective of the organisation as a whole.
Most participants of the KPS have an academic training, and work daily in the pension sector. So the main aim of KPS has been to provide a modifying influence on the thinking and shaping of pension plans. The freedom KPS members have in setting up their own ideas and projects has been the main driver for the organisation lately. Individual members are free to express their own views and positions.
Even if some members have joined KPS through the corporate membership of their employer, the individuality of the membership remains a central tenet, says Akkermans. “The main difference between the KPS and other pension organisations is that we have stayed to be individually orientated. The freedom of expression is not a goal but an instrument in setting up the right framework to address issues forming and threatening our sector”.
Since KPS members work in a wide range of sub-sectors of the pension sector, a wide variety of opinions, views and theories are a normal fact of life, says Bogaard.
“In most other pension research organisations a lack of independence has been a major stumbling block. The KPS will never become a lobby organisation. In contrast to organisations such as the VB, OPF and others, which are sectoral organisations meant to lobby politicians, media and competitors to incorporate their own ideas or strategies.
“The KPS has never taken this position throughout its history. Most reports or statements made by KPS or affiliated pensions are made on a personal basis. The need to keep in mind the interest on behalf of the participants of different disciplines from the top of the pension world is one of the main functions of the organisation’s management.”
KPS officials may need to discuss pension topics in response to requests by politicians, media, supervisors or government organisations. In this case the opinion of the KPS as organisation will be presented.
Akkermans and Bogaard suggest that the current situation of the pension sector is still unclear, particularly in relation to its customers. As there is still no set range of certification, as in accountancy (RA), the pension sector still is looking for a so-called RPA.
The KPS, they say, will be involved the coming years in addressing this issue, with the focus on certified pension administrators, advisers and managers. Most customers at present need to trust the people they are working with, without having the necessary instruments to address possible conflicts. The need for certification is obvious, says Akkermans, and the sector needs to address this without any delay.
Akkermans and Bogaard agree that the impact of the implementation of the new Pension Law will be immense. Even though the final text has not yet been approved, the published proposal by the Minister shows that it will come into effect in 2007. Parliament and sector organisations will have their say over the next 12 months.
The outcome is still unclear, but the major issues are known. Akkermans expects that most criticism the next months will come from the insurers, since they still have several issues unresolved, such as the treatment of defined contribution arrangements in the Pension Law. One thing is certain. 2006 will be a key year.