Before the summer, pension funds and pension insurers will inform their scheme members individually by letter of the effects of the credit crisis on their pension. Consultations are currently ongoing between the AFM, DNB, the Ministry of Social Affairs and Employment and the pension umbrella organisations. If the pension funds and insurers have properly informed their members by letter, they will not have to apply the indexation label in 2009.
The global financial crisis has had a serious impact on Dutch pension funds. There is plenty of general information available, but the consequences for individual scheme members have not yet been made clear. It is important that scheme members, former members and pensioners are informed as to the specific situation at their own pension fund. It is therefore essential that communication with stakeholders is transparent and pro-active. This will increase confidence in the pension funds and the Dutch pension system.
The AFM, DNB, the Ministry of Social Affairs and Employment and the pension umbrella organisations are consulting on the best way the pension funds and pension insurers can inform their stakeholders. These consultations are expected to result in a model letter that all pension funds and insurers can use to inform their scheme members in an understandable manner.
The AFM takes the view that clear communication with scheme members regarding the consequences of the crisis, and any recovery plans, as regards indexation, contributions, retention of rights and value transfers is essential. It has therefore been decided not to apply the test of the indexation label, which had already been postponed until 1 April 2009, subject to the condition that the pension funds and insurers send the model letter to their stakeholders in the second quarter of 2009. Naturally, the pension funds and pension insurers may apply the indexation code if they so wish. In the case of insurers (where the problem of recovery plans does not arise), the question of whether a model letter is a good alternative or the indexation label should be applied as planned is still under consideration.
After completion of the consultation, the pension funds and insurers will be informed as soon as possible, which is expected to take place in the course of March. The model letter will be provided at that time. The AFM has decided to issue this statement at this time since this will have operational consequences in the pensions industry.
The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.
The AFM is committed to promoting fair and transparent financial markets.
As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.