NETHERLANDS - Dutch pension funds are struggling with the introduction of new governance rules, according to a KPMG Financial Services study.

Almost 50% of the schemes still have to make a start with the most important steps, such as establishing an internal supervisory body and an accountability organ, KPMG found in a survey of 75 pension funds.

These principles for pension fund governance are meant to offer guidelines for internal supervision, communication, participation and accountability by the boards of schemes.

According to KPMG, schemes usually prefer a council of participants, complemented by employer's representatives.

In addition, most pension funds opt for a visitation committee. A limited number of schemes have chosen a one-tier board, in which supervising board members check colleagues on implementation, it noted.

Nevertheless, over 80% of the schemes surveyed expected to have completed the implementation of the governance rules before 1 January, KMPG said.

On participation, it found a majority of schemes had opted for a council of participants, the inclusion of pensioners on the board or a combination of both.

"It is remarkable that schemes have made such limited progress on introducing the governance principles," said Edward Snieder, a manager within KMPG's financial practice.

"As investors in listed companies, pension funds embrace corporate governance. However, their own governance does not appear to have been given priority so far. Moreover, many schemes have underestimated the time required for its implementation," he commented.

"The reality is that each scheme must decide on the kind of governance suitable for its specific situation. This requires internal agreement, and therefore time. To establish which issues require quick decision-making they need to formulate their own basic principles and check them against the governance rules now.

A recent survey by the Association of Company Pension Funds (OPF) found the staffing of accountability and internal supervision bodies is one of the most common sticking points.

Furthermore, many schemes consider the implementation time as too tight because they are busy with other issues, such as the introduction of a new pension regulations and reporting, the effects of the new Pensions Act and the new financial assessment framework (FTK).