Dutch regulator demands funds step up work

09 November 2007

The Dutch pension regulator and central bank DNB wants corporate pension funds to increase their efforts to secure durable pension systems, DNB director  Arnold Schilder has said.

Speaking in Scheveningen yesterday, Schilder stressed the need for cost-saving measures and increased efforts to comply with governance requirements.

Moreover, he urged pension funds again to implement a 'continuity analysis', part of the new financial assessment framework nFTK, as a way of gaining insight into the financial effects of unexpected events during the next 15 years.

“At the beginning of this century, a number of steps have been made towards improving the operational framework with the introduction of the Pension Act and the Financial Assessment Framework (FTK),” he said, adding this operational framework now needs to be filled in.

Calling it the next hurdle, he said the DNB now expects pension funds to do their bit in the process by implementing “realistic continuity analyses, controlling costs and increased haste in the area of governance demands”.

Earlier this month, DNB director of supervisory policy, Klaas Knot told IPE the average pension fund may well be too small to be affordable in the future.

“A larger scale leads to lower costs, and many well-known academics have observed that, currently, the average [size] is possibly lower than the optimum,” he said, adding
employers with smaller funds may need to be more transparent about the added value of the fund’s relative smaller size.

Schilder echoed Knot's warning yesterday, stating cooperation among pension funds is a vital step to reduce costs.

© IPE International Publishers Ltd.