NETHERLANDS - Dutch banks will soon be allowed to offer tax-friendly pension products on a similar basis as insurers, thanks to government changes to the regulatory regime.
In order to drive down pension costs through increased competition, workers and self-employed with a pension gap will now be able to save for an individual pension through ‘blocked accounts' which cannot be accessed until a later date, parliament has decided.
Deposits into a person's plan can be deducted from income before tax as part of the move to incentivise saving.
Until now, insurers had a monopoly on third pillar pension products so as part of the deal banks will have to provide maximum transparency on savings and investment accounts for a pension, through the so-called ‘Financiele Bijsluiter', Finance minister Wouter Bos said.
The minister has also promised additional research on the effectiveness of the transparency rules on costs to ensure banks and insurers do not prevent customers from moving between companies by charging high fees.
Full details will be discussed with consumers' organisations, banks and insurers and the outcome will be laid down in a regulation order.
"We are ready to launch savings products for pensions," a Rabobank spokeswoman commented. "We expect the banks could take 90% of an expanding market, in particular if we manage to offer cheaper and more transparent plans than the insurers."
Rabobank is also looking at the future, when the money in the blocked accounts becomes available as a spokeswoman said "we want to offer products for then as well".
ABN Amro is also enthusiastic about the new opportunity.
"We are already busy developing products," a spokeswoman said, as the bank expects to be in a good position to offer greater transparency.
But Henny Zoontjes, spokesman for the Dutch Association of Insurers (VvV) said, in his opinion, parliament has missed an opportunity to simplify the present legislation on third pillar products.
"We aren't afraid of competition, and we doubt whether banks can deliver cheaper products than we can," said Zoontjes.
The decision of parliament - following an initiative by labour party PvdA and liberal party VVD - still needs approval from the Senate but this new legislation is expected to come into force on January 1 2008.