VB behind API if schemes remain mandatory
NETHERLANDS - The Association of Industry-wide Pensions Funds (VB) said it will support the new general pensions vehicle API, if the position of mandatory industry-wide schemes remains fully intact.
That said, the API must not put pressure on existing defined products or cross the domain of industry-wide pension funds either, VB made clear during a hearing of the parliamentary select committee for Social Affairs.
Products and the domain of industry-wide schemes - with their legally privileged position - have been fenced-off, in order to try and create a level-playing field with insurers.
While Social Affairs' minister Piet Hein Donner proposed the fencing of products and domain so they are under the same regime as an API, the VB believes a level playing-field must continue between pension products - such as a company scheme - carried out by an API and industry-wide schemes.
"The government needs to take sufficient time to evaluate the tasks and compulsory character of schemes. Therefore, this issue must be detached from the discussions about the API," VB spokeswoman Gerda Smits told IPE.
VB pointed out the widely-praised Dutch pension system is partly founded on the mandatory principles of schemes.
In VB's opinion, supervisory arbitrage - which could see pension funds shopping around for the best deal - should be prevented, both locally and internationally. However, the required harmonisation of supervision, through a new European Directive Institutions for Occupational Retirement Provision II, seems to be long way away, it noted.
The lobby organization has again called on the government to improve of the tax climate, and abolish VAT on asset management services, in particular.
"If company schemes are allowed to ring-fence assets of different pension funds in an API, similar conditions should apply to non-mandatory industry-wide schemes," VB stressed.
The Foundation for Company Pension Funds (OPF) recently urged the government to speed up its plans for the modernisation of the Dutch pension system and requested asked facility be made to ring-fencing assets of individual schemes in an API.
According to the VB, pension fund governors find it difficult to see any options for exporting pension product to an API under the current proposals.
In contrast, pension providers say they have spotted real opportunities allowing them to manage foreign pension schemes, the body added.