On 27 December 2012, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €200,000 on Goudse Levensverzekeringen N.V. (Goudse).
This fine was imposed because in 2010, in connection with the termination of participation in a pension scheme for certain participants, Goudse provided documents to these participants who were leaving the scheme in which information which is prescribed by law, and which is important to such participants, was lacking. This means that the rights of the relevant participants may have been prejudiced, because – as a result of the fact that important information was withheld from them – they were unable to make well-considered choices about their financial situation.
The AFM investigated a large Goudse pension contract. The investigation showed that in 2010, Goudse had sent participants that were leaving the scheme, upon termination of their participation, only an adjusted paid-up policy, a value statement with explanation, and an annual overview. These documents do not contain any information about the granting of supplements and about the right to value transfer or the possibility of a value transfer.
Value transfer and the granting of supplements
The provision of this information is very important in order to enable participants to make well-considered choices about their financial situation. For example, participants have to be informed of their statutory right to value transfer within six months after termination of employment, in order to be able to exercise this right.
In order to make a decision about any value transfer, participants must also be informed about the granting of supplements concerning their paid-up benefits. The degree to which supplements are granted determines, among other things, the degree to which the pension benefits remain index-linked if they are not transferred.
The above means that Goudse violated Article 39(1) of the Pensions Act. This Act obliges pension administrators to provide participants who are leaving a scheme, upon their termination of participation in a pension contract, with information concerning, among other things, value transfer, the granting of supplements, the consequences of occupational disability and the lapse of cover for the risk of death.
Information provided as yet
Pursuant to the findings of the AFM, Goudse provided the information prescribed by law as yet to the relevant participants. It also offered to arrange for a suitable solution if former participants indicate that their rights have been prejudiced because Goudse failed to provide the relevant information on time.
The basic amount for violation of Article 39 of the Pensions Act is €500,000. When determining the amount of this fine, the AFM took into account, in its considerations, the seriousness and duration of the violation, the culpability of Goudse, and Goudse's financial capacity.
Interested parties can submit the AFM's decision to the competent court for review.
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.