The so-called 'light' PPI has grown too heavy, says Mercer consultant Tim Burggraaf.
As the Dutch pensions industry marches toward the defined contribution (DC) model with the new national Pension Agreement, the regulator has been taking its time to provide licences for Premium Pension Institutions (PPIs), the newly developed DC vehicles.
This vehicle started off as the 'no-brainer' option. The Dutch already provide heavily governed pension vehicles such as pension funds, so let's add a light version that can compete with the Belgians and Irish!
Well, the light version started off four years ago being very light, but gained a lot of weight during the first three years of its life because of the additional bolts and screws that supposedly offer more security for the market.
At the time of adolescence, the now less-than-light version lacks the necessary diet to shed some of this saturated fat.
And to make matters worse, the regulator now seems intent on putting on more weight through the endless process of licensing.
Indeed, not only has the vehicle itself gained weight, the file for a license request has become downright obese, expanding to more than 1,500 pages (according to one of the candidate PPI providers).
No wonder time has run out for the regulator to sift through the 15 applications. Time is up (some applications are already well overdue).
Being as professional as it is, it is time for the regulator to take responsibility and 'let the games begin'. Give them bread and plays! Otherwise, our so-called light vehicle will grow so heavy it will be unable to take off.
Tim Burggraaf is a consultant at Mercer