The Dutch government’s planned pension reform could be deemed incompatible with European law in a number of respects, according to Dutch lawyer Hans van Meerten.
“The plans of the government are really neither comforting nor convincing,” he writes in the September issue of IPE magazine.
He raises three points in connection with the planned switch to a “collective yet individual” defined contribution (DC) system: conversion of existing pension rights vis-à-vis European property rights, compulsory participation in pension funds; and consumer protection.
With regard to the first point, Van Meerten argues that the EU Charter of Fundamental Rights could be invoked directly against a pension fund in connection with the conversion of existing pension rights, while the government is being advised that this is possible under the European Convention on Human Rights.
He also challenges the government’s view that the switch to DC does not call into question the legality of mandatory participation in a pension fund.
About 80% of Dutch pension savers participate in a mandatory pension fund, which has to be a Dutch legal entity, van Meerten noted. In 1999, the European Court of Justice ruled that compulsory membership of industry-wide pension schemes was not contrary to European law.
The third point van Meerten raises about the Dutch pensions reform plans is EU consumer protection, which he says “reached a new, high level of individual protection in recent years”.
Current pension fund governance systems seem “outdated” with regard to expectations of a high degree of individual protection, he writes.
“This is built on the assumption that pension funds execute DB only. Yet these governance structures are, strangely enough, not part of the reform.”
— to www.ipe.com