Following the agreement between the Social Partners and the Cabinet, it became clear yesterday that there is broad support in the Lower House for the new Pension Agreement. The new pension system will be implemented in phases from 2022 onwards and although it is widely praised as a major and important step forward, it will also cause headaches on both sides.
16 Jul 2020
The pension will become more volatile and will rise sooner when the economy is growing, but will also fall rapidly when the economy is less buoyant. This makes it more transparent and personal, according to those involved. Certainly also because participants gain insight into their contributions and the accrued capital. The pension fund board remains responsible for the attitude to risk.
As indicated by Minister Koolmees, the new system will be introduced in a number of large and small legislative changes. In addition to substantive changes, it also means that we will be in transition for some time to come.
The contours are clear, but there are still many details that need to be worked out in more detail.
- What role will the VEV and the coverage levels play?
- Which asset categories are interesting?
- How will the pension fund remain in control?
- Is the outsourcing policy still correct and complete?
- What does the investment chain of pension funds look like?
- Is risk management in order?
- Is now the time to do more with ESG?
- Should a pension fund further strengthen its governance by separating policy, implementation, administration and reporting?
The impact will not be negligible for the pension fund and the transition phase will provide the necessary administrative pressure.
The way in which DNB will shape its supervision and approach the transition period will partly influence the speed and organisation of the necessary change processes at pension funds.
As the 'Center of Excellence for Pension Funds' (CEP) within the CACEIS group, we support the pension sector in these challenges by deploying our knowledge, implementing Asset Servicing processes and offering solutions for the entire investment, reporting and monitoring chain.
In the coming period, we will inform you in a series of articles about the solutions with which we support the sector in this transition.