In the Netherlands, our politicians want our money. They’ve got some of it already, in the form of our government bond holdings, and now they want some more.

At the most recent meeting of our Dutch trustee board, the board members discussed the latest plan to make it attractive for pension funds to invest in local mortgage debt, which would be issued by a new mortgage guarantee body.

Unlike some of our continental neighbours, we Dutch like to own our own houses. But the trouble is the market is very sluggish at the moment, with house prices down by about 20% in five years, and a quarter of households in negative equity.

I am not a member of the trustee board but I attend the meetings as an observer.
Ronald holds forth: ‘Our obligation is to our members and our professional investment team has been put in place to select investments on the basis of an independent risk-return assessment, not because some politician or other wants us to’.

The other board members agree: ‘SNS Reaal was bailed out only a short while ago and the idea of investing in housing bonds so soon after the sub-prime affair in the US is very worrying,’ says one. ‘And the IMF’s report was very negative on this idea,’ says another board member.

‘Don’t forget the views of members,’ adds Ronald. ‘Every time we suggest an unfamiliar asset class or new manager we get letters and e-mails from people worried about whether we are going to lose their money.

‘Peter,’ he says, looking in my direction, ‘you remember those CDO managers coming over from the states in 2006 and 2007 peddling the tranches of this and that, as if we were stupid?’

Ronald is right. Luckily we did not see the merits of those ideas at the time and were not convinced, either, about the managers or the underlying investments and the return promises. We were right, although not entirely for the right reasons.

Suffice to say, the consensus of the trustee board is that Dutch housing bonds are not something that Wasserdicht Pensioenfonds should be very interested in.

After the meeting, Ronald and I talk on the way to the carpark. ‘It’s possible the politicians might put us under some pressure,’ I say. ‘Then we would really have to read between the lines.’

‘Then they’ll have me and thousands of angry pensioners and pension fund members to deal with,’ Ronald replies, pausing in front of a picture of our new king and queen.

‘We all agree that our members’ interests are paramount but we are in an era of financial repression,’ I tell him. ‘Just look at the amount we hold in our government’s debt at such low yields because the regulation tells us its the safest place to invest. They’ve already got our money and now they just want more.’

Pieter Mullen is investment director at Wasserdicht Pension Funds