PVK hopes to answer regulatory questions soon
NETHERLANDS – The PVK, the Dutch pensions regulator, hopes to be in a position shortly to be able to answer pension funds questions about the application of the new regulatory regime.
In a frank assessment of the difficulties facing the PVK, its head, Dirk Witteveen, said that a new supervisory framework was being put in place with the new pensions bill approved in Parliament, the financial assessment framework (FTK), due to be implemented in 2005.
“In addition there was the Brussels project, which people think will arrive by 2008”, he said. Witteveen was speaking at Pensions Summit 2004, held in Wassenar, by Fund Partners.
Currently, he said the PVK was working on finding answers to the questions it was being asked. “We are moving in the direction that we would like to see funds using a more internal model. If this is solid (robust) that would be fine,” he said.
Regarding moving from the position set out in the PVK’s letter of September 2002, which included the four percent liability discount approach, he would like to see this “loosened”, but this was not definite at this point. “This was still being examined.”
Witteveen said: “In one sense, it is logical to go there. This move would be possible provided the fund remained in the situation of maintaining cost coverage premiums, and not reducing contributions or returning money, where there are thoughts about indexation.”
On indexation of benefits, he added: “We all know what is in the paper, but we are pretty sure that no fund has in place a communication for stakeholders, a financial plan and internal model that is good enough to pass the test.” He was hoping to have the relevant answers here by summertime.
The aim was to have in place the basis for accepting plans next year that are based as far as possible on the upcoming FTK, he said.
He also addressed the issue of the legal basis for introducing the FTK, when the current pensions law was still in place. Witteveen said he expected that any difficulties could be successfully managed in the meantime.
“While all the pension funds have their plans in place for this year, some are now coming saying they would like to change these for 2004. These have been told that this cannot be accommodated unless there is an emergency.”
He said: “So long as you are not asking us to readjust plans for 2004, I promise that we will be ready before the summer to give answers on how we are going to assess the situation for 2005.”