As CIO of the Wasserdicht Pension Funds in the Netherlands, I have quite a bit to do with our fund’s boards and committees. I am on the management board of what we now call the ‘investment bureau’ and in that role I have to sit in on many trustee board meetings as an observer and answer questions.
In common with our fellow pension funds here in the Netherlands, we are already subject to a complex set of rules that govern the structure of our fund, with a participants council and a ‘visitation committee’ that conducts a periodic assessment of the fund.
I also often answer questions from the members of the participants council and, believe me, they are an informed, vocal and opinionated group of people. That particularly goes for the pensioner members, who have time on their hands to read all our communications.
Now we have to change the way we do things. Although there have already been a number of ideas about how we should structure our Dutch pension fund boards, it seems our parliamentarians have picked the most confusing combination of them all. And, of course, our polder model prefers to include every point of view.
The current law has taken two rounds of consultations, three debates in Parliament and many amendments. And still no-one seems to understand the structure.
Our legal adviser, Herman, from Molleman Brinkman Hoogsteen in Amsterdam, came in one afternoon to brief our trustee board on the new system. I had the pleasure of attending the briefing as an observer. Put it this way, my eyes started to glaze over after half an hour of explanations about permanent supervisory boards, accountability councils and stakeholder bodies, not to mention the three options for a one-tier board and the two models of independent boards. And I don’t think I was the only one.
Afterwards, I talk to Herman and Ronald, chairman of the trustee board. ‘I’m sorry to send you all to sleep like that,’ Herman apologises, ‘This is important but not something you can explain to someone on the back of an envelope’.
‘It looks like equal-representation-plus is the model for us and, as you said, we have three years to create a permanent supervisory board,’ replies Ronald. ‘You didn’t exactly have us riveted, but we certainly needed someone to take us through all that,’ he adds as we reach the car park and Herman says his good-byes.
‘Those lawyers must be making a mint out of all this,’ I say to Ronald as we head back into the building. ‘True enough,’ replies Ronald. ‘But now you need to think about how you will work with the two independent experts we appoint to the board. I was thinking of one risk management and one investment expert.’
‘I can think of plenty of suitable candidates,’ I say. ‘And the new board’s work will be cut out now we have to work out whether we choose a nominal or a real contract under the new FTK.’
Pieter Mullen is investment director at Wasserdicht Pension Funds