The Dutch pension market is losing 70 schemes every year as smaller funds go into liquidation and switch their liabilities to insurance companies in anticipation of re-insurance rules to be applied next year.
Kees Verhagen, spokesman at the Appledorn based Verzekeringskamer (VK), says legislation is expected by 1 January 2000, stipulating that schemes of less than 100 employees must be re-insured.
“An employer with a small number of participating workers in a pension plan will have the option of either re-insuring the scheme, which may be costly or directly insuring the employees.
“This is the main reason the schemes are being liquidated.”
Verhagen says in the last year there have been around 95 such liquidations and that since the trend began in 1996/97 around 100 other pension funds have liquidated their assets.
“Every year about 20 or 30 new pension funds are set up, so on a yearly basis it means there are around 70 pension funds less than the year before,” says Verhagen.
He notes however that the procedure for liquidation is carried out by the VK.
“We can see that the liabilities will go to the insurer in a good way, which is important.”