The Dutch pensions industry is already monitored by the Dutch Central Bank, DNB, and the Authority Financial Markets, AFM. Now a third supervisor, the Dutch Competition Agency, NMa, is joining the fray and turning its attention to the pensions market. Mariska van der Westen spoke with the head of NMa’s financial sector monitoring division, Fieke van der Lecq

While the pensions industry in The Netherlands has become accustomed to dealing with two supervising agencies - the DNB and the AFM - many feel that adding a third supervisor to the mix is taking things too far. Two may be company, but three is a crowd. In addition, some wonder what business an anti-trust watchdog might have in the pensions sector. After all, competition has been curbed in the interest of a pensions system based on solidarity and collectivity.

Collective pension schemes are exempt when it comes to anti-trust law and the same holds true for mandatory participation. Moreover, competition between pension funds and other providers such as insurers falls under the supervision of the DNB. In other words: there simply is not anything for the Dutch Competition Agency, NMa, to supervise.

Not so, says Fieke van der Lecq, (pictured right) manager of the financial sector monitoring division at NMa. “Pension schemes may be exempt from competition law, but the pension funds that administer and manage the schemes are not. Both economically and legally, pension funds should be regarded as companies. They offer a financial product and undertake activities in the market. To that extent they should refrain from any behaviour that might jeopardise free competition, and it’s our job to make sure that they do.”

The fact that DNB is supervising competition between pension funds and insurers doesn’t present a problem, according to Van der Lecq. “It may seem awkward to have a tiny DNB island dotting the sea of our competition supervision. But that’s just the way things grew historically and the two agencies work well together.”

When pension funds and insurers clash - something they’ve been wont to do more often of late - DNB does the supervising honours as determined by law. “In those cases NMa simply watches from the sideline, albeit with keen interest,” says Van der Lecq. In all other competition-related issues, NMa is the supervisor on watch. “In cases such as the merger between Cordares and ABP’s newly independent pensions administrator APG, NMa is the one to control the merger.”

According to Van der Lecq the industry needn’t fear for an avalanche of extra paperwork as NMa steps up it supervision of the sector. There are no forms to be filled out and no periodical reports to be filed. “Although, of course, there is some paperwork involved with mergers and takeovers. And over a certain turnover threshold, notification of intended mergers between pension schemes is mandatory. Now that there’s a clear consolidation trend taking shape with many smaller funds merging into larger organisations, we do expect to see more of this.”

All the same, NMa is not the kind of supervisor that turns up on a pension fund’s doorstep at the drop of a hat: “Most pension funds will barely notice us. In fact one can compare NMa to the police. As long as you don’t break the law, you have nothing to fear from them.”

And just like the police, NMa can lend a hand in times of trouble. “Pension funds will not only find NMa in their path when they run foul of the law. One can also turn to us if they themselves are the victim of unfair competition. We’re seeing that parties in the pensions sector find their way to us ever more often.”