Quality control and search engine for Dutch schemes
THE NETHERLANDS - Dutch political parties are proposing to put into place a quality control certification for all Dutch pension funds. If implemented, contributors and pensioners will have the option to find out the current financial situation of their pension fund, its quality control and overall performance.
The Algemeen Dagblad newspaper reported that the leading three parties, Labour , Liberal and the Christian Democrats (the latter two form the current government) are proposing a quality label for pension funds.
Labour Party MP Staf Depla, who is the initiator of the proposal, proposes a five level system. In a colour coded arrangement going from A to E, pension funds should be assessed and qualified against their peers.
At the same time, the parliament has proposed to put into place an online pension register, in which everybody can easily find out their pension situation, including the state pension (AOW), which would be an integral part of the Depla proposals to show the quality of a fund, a particular pension arrangement, the level of indexation and total growth of the pension rights.
At present, several critics have been arguing that most pension funds are still unclear or lack transparency regarding their financial performance.
The political parties are focusing especially on a quality control system to give the individual scheme contributor the option to see what the performance of the pension fund is when changing jobs or employer. He can assess the situation before or during his negotiations with the new employer at a higher level. It is also important part of the assessment when deciding to leave his current pension fund rights with the old fund or to transfer it to the new fund.
One of the main supporters of a pension registration system is the Dutch consumer organisation Consumentenbond. In a response, it stated that the 800 pension funds need to start working together. A spokesman of the consumer association however stated it is still utopia to think that an employee will change employer because of a pension fund system.
Meanwhile, the Dutch association of industry-wide pension funds (VB) has welcomed the calls for a national internet pensions search engine.
An on-line pensions search engine that enables the Dutch consumer to have a very accessible overview of their pension rights should be easy to realise, said VB's director Peter Borgdorff in an interview with IPE.
"We are enthusiastic about this because most people in Holland have more than one job during their life time; hence it would be very good to have an overview of where your pension rights are and how much pension there actually is," said Borgdorff.
An additional improvement would be that the Dutch state pension AOW be included in such an overview service.
Dutch industry-wide pensions provider Cordares has taken the initiative to bring together the wider circulating plans for the pension register in a business plan jointly with different pension funds and including the VB, Borgdorff said.
However, there are still some "political obstacles" that need to be overcome, such as the fact that the identity of the consumers involved needs to be checked properly and there is still uncertainty about how to approach this.
Borgorff's said in the Dutch newspaper De Telegraaf that he expects to have more clarity on project in October. He thinks that a national pension search engine could be up and running by the end of next year.