PFZW Welcomes Transparency Rules of Dutch Pensions Agreement
06 June 2012 (PLANSPONSOREurope.com) -The transparency that the Dutch pensions agreement brings will help pension funds meet the difficult challenge of explaining the need for investment risk to secure a good pension, a spokesperson for PFZW has told PLANSPONSOR Europe.
Last week as part of the new Dutch pensions agreement, Dutch Social Affairs Minister Henk Kamp announced a new assessment framework for pension funds.
Some of the main elements of the new assessment framework are:
• Social partners and pension funds must be transparent about the prior distribution of financial risks, so that young and old know where they stand.
• Funds must be clear in communicating these risks to members and the consequences for the purchasing power of their pensions. Participants are entitled to a realistic image as well as whether or not they should fully index the pension.
A PFZW spokesperson told PLANSPONSOR Europe that the fund believes in more transparency and has been actively working on this for some time.
“In the past the risks were not pointed out clearly enough to the participants. It is difficult to explain investment risks to the participants. Mostly it is assumed that lost on investments is the main reason of the crisis, although PFZW has achieved an average return of 6.7% over the last 10 years (including three times a crisis) and we have more assets than ever before. This is the most difficult challenge; explaining the necessity of a certain investment risk to achieve a good pension. We are hopeful that we will be able to explain this to our participants. In an online survey ‘Dit vind ik’, the majority of the participants choose a pension with some risk over a lower guaranteed pension.”