NETHERLANDS – The €140bn Dutch pensions provider PGGM and the €26bn Danish provider PKA are keen to share the best their respective pensions systems have to offer with their peers across Europe.
At a recent joint meeting with PKA in Brussels, Else Bos, chief executive at PGGM, said: "We would like to inspire the key decision-makers in Europe with the solutions of the two most effective pensions systems."
Many consider the Danish and Dutch pensions systems as the best in the world, with Mercer recently ranking them first and second, respectively.
Last year, PGGM and PKA – which both serve pension funds in the healthcare sector – reached an agreement to cooperate on expertise-sharing and investments, and indicated that they also aimed to add value on risk management, cost benchmarking and cost transparency.
In Brussels, Bos and Peter Damgaard Jensen, PKA's chief executive, said they believed the multi-pillar element within their respective systems, the mandatory participation in the second pillar and their ongoing reforms of the industry served as "strong links" with the European Commission's White Paper on Pensions.
They cited "joint opportunities" in improving communications with participants and cost-effectiveness through benchmarking, as well as in providing solutions for flexible retirement and to help people remain in employment longer.
Bos and Damgaard Jensen said they also hoped to develop solutions for the so-called 'rest' groups, such as self-employed workers or employees on flexible contracts, which tend to have little in the way of pension savings.
PKA's chief executive estimated that as much as 20% of the Danish working population would fit within this category.
Bos and Damgaard Jensen agreed that building multi-pillar pension systems across Europe would be the "greatest challenge" due to new regulation and additional administrative costs, as well as increasing pressure on fiscal incentives.
PGGM – the pensions provider of the €135bn healthcare scheme PFZW – provides collective defined benefit arrangements, with a pension promise. Contribution, indexation, as well as rights discounts, are steering instruments for funding.
PKA offers companies collective defined contribution plans through life insurance, with partially guaranteed pension rights.
In both cases, the pension plans are subject to risk-sharing.
PGGM collects a contribution of 16% of salary, whereas PKA's premium is 13-16% of salary.
Both PGGM and PKA claim to provide a pension of 70% of salary after a full working career.
The pension providers are currently working together to provide a pan-European tracking system for pension rights, at the European Commission's request.
Denmark and the Netherlands already have operational pensions registries.