This autumn our government is orchestrating what it calls a ‘national debate’ on the future of our Dutch pension system. We at Wasserdicht Nederland have always taken a prudent approach to our pension schemes and we have remained well funded. Unlike many other Dutch funds, we have not had to implement benefits cuts – something I hope our members appreciate.
However, our trustees have had to increase contributions steadily over the years, both for our sponsor and for our members. As you can imagine, the younger members in particular are less happy about this than the older ones, who are naturally more appreciative of their pensions, even if they are a few years away from retirement, as I am.
Wasserdicht is a traditional, paternalistic employer and has also retained the DB scheme, in the Netherlands at least. But now some of the board members of our sponsor want to consider moving towards DC. Christer, our Swedish CFO, thinks DC is the future and is pushing for a change. Last month, Christer asked the trustees to poll the members to find out what they think about the pension scheme.
Rolf is our long-standing chairman of trustees and there is almost nothing he doesn’t know about pensions and the pensions system. But there are gaps in our knowledge, he says. ‘Our sponsor thinks it’s time we asked our members some searching questions about what they want from the scheme,’ Rolf says. ‘We think we are doing pretty well but we don’t know what our members think.’
I decide to conduct my own private poll of my Wasserdicht pension colleagues. ‘You should appreciate how high the contributions in Holland are, my friend,’ says Cliff from Wasserdicht’s Toronto office. ‘Our contributions were too low for several years and now we are having to make up the shortfall.’
Joe in London says DB is history now in the UK. ‘Wasserdicht UK has closed its scheme to new entrants. You should be happy for what you have, even if things are not perfect.’
Helmut in Frankfurt is cautious. ‘You should keep building up your reserves,’ he says. ‘And be thankful that you have a more flexible discount-rate framework than we do in Germany. Our Pensionskasse can barely invest in risk assets, thanks to the regulations we have in place.’
I was expecting Jim at Wasserdicht Dallas to be an advocate for DC. But he is more cautious: ‘Don’t be too excited by 401(k) plans, Pieter,’ he says. ‘A lot of people had their employee stock plans in their pension when they should have diversified. I should know, I was one of them.’
As I am driving back home one evening I phone Rolf on my hands-free. ‘I’ve taken stock of what our pension colleagues from around the world think,’ I say. ‘We may not be able to hold off against a move to DC, but at least we can learn from everyone else’s mistakes.’
Pieter Mullen is investment director at Wasserdicht Pension Funds