TRANSITIENIEUWS – Nieuwe beleidsuitingen DNB over de Wet toekomst pensioenen zijn gepubliceerd

The DNB has released new policy statements regarding the Future Pensions Act (Wtp) on their Open Book Supervision platform, publishing updated factsheets and Q&A’s, covering topics such as risk attitude, contracts, and the acceptance of assignments and portability.
1. Risk attitude relates to participants‘ willingness to take investment risks, involving a Risk Preference Study and determining risk attitudes translating these into long-term investment policies, and conducting annual risk exposure assessments. The newly published Q&A covers the question “Should a pension provider adjust the investment policy and/or the allocation rules if the established limits of the risk attitude are exceeded?“, answering that, if risk exposure exceeds set limits, pension providers must adjust their investment policy, per Article 14d(1) of the Pw and Wvb Decree. The identified risk assessment guides the policy, and any breach requires immediate correction before the next annual assessment
2. DNB’s updated factsheet under the Contract section discusses the requirement for consistency between contributions and pension objectives in the solidarity contribution scheme under Article 10a of the Pensions Act. Pension administrators calculate the likelihood of meeting pension goals with contributions, with periodic reviews at least every five years. Parties responsible for pension agreements determine contribution alignment with objectives, and a uniform scenario analysis is used for the legally required calculation. The Commission on Parameters provides opinions on parameters and scenario sets every five years, impacting the achievement of agreed pension objectives. Social partners may reassess contributions and objectives based on changes, requiring a revised calculation and order confirmation in significant situations.
– The new Q&A addresses whether a pension provider can depart from established rules for solidarity or risk-sharing reserves. The answer, is that a pension provider does not have the authority to deviate from these predetermined rules. The rules for reserves are typically set for a minimum period of five years.
– The second new Q&A questions whether to use the solidarity or risk-sharing reserve to hedge inflation risk. Article 1h of the Decree on Obligations and the Compulsory Retirement Scheme Act allows for sharing the risk of unexpected inflation within a pension scheme, subject to conditions. The pension administrator must determine, in advance, the inflation level for hedging and provide objective verification. Sharing inflation risk through reserves is only permitted for the portion considered.
– The third new Q&A pertains to how a pension fund calculates the minimum capital requirement (MVEV): For schemes with investment risk, MVEV is 4% of gross technical provisions, adjusted by the net/gross ratio. For schemes without investment risk, MVEV is either 1% of gross technical provisions or 25% of the previous year’s net management expenses, depending on the management burden duration. Additional percentages may apply for risk capital. The MVEV is calculated per pension scheme and summed for multiple schemes. In premium contracts, where parties bear investment risks, the fund assumes the risk if a fixed benefit or guarantee is part of the scheme.
3. Pension administrators must create an implementation plan outlining the execution of new pension agreements, covering preparations, accrued pension rights, feasibility, technical execution, and accountability. Emphasizing data quality, the plan is mandatory for changes by 30 June 2023, without transitional provisions. Submission to DNB is required within two weeks of board approval, with deadlines of 1 July 2025 for pension funds and 1 October 2026 for insurers. Procedures for significant post-submission changes are outlined.
4. The transition-FTK framework, permits merging funds to submit a bridging plan to DNB. The plan justifies the submission, details financial situations until the merger, and includes coverage ratios and measures for equity alignment. It outlines deadlines, conditions for adjusting investment policies, and criteria for indexation decisions. The document also addresses net benefits calculations, participant information, consultation with the accountability body, and stakeholder approval.
5. The decision-making process for amending pension schemes is discussed in the section Command acceptance and approach.
Since 1 July 2023, pension funds can submit entry decisions and implementation plans to DNB by Mijn DNB. The updated factsheet details the legal and pursued lead time for DNB’s assessment, involving control, assessment, and decision-making phases. The pension fund may object to the decision within six weeks, and there’s provision for partial assessments to facilitate the overall assessment.
– The new factsheet on order confirmation, explains the process after social partners assign a pension scheme. The pension fund board formally accepts the scheme, including information on the pension scheme’s organization, design rationale, and consequences of employment-conditional choices.
– The new Q&A 1 pertains to the timeframe for DNB to assess an internal collective value transfer report. The assessment period begins upon DNB’s receipt of the entry notification and extends until the intended value transfer date, which must be at least six months after the report. DNB has the authority to extend this period and can also suspend the assessment period to request necessary information from the pension fund.
– The new Q&A 2 specifies that an intended internal collective value transfer notification, is considered submitted when two conditions are met: The pension fund electronically submits the report using the specified form or has has submitted at least all the required data.
– The new Q&A 3 answers that a pension fund implementing a transition under the Future Pensions Act is required to create both an implementation plan and an own risk assessment (ERB). The ERB focuses on strategic decision-making and risk management, while the implementation plan outlines how and when the pension provider will execute the new pension scheme.
– The new Q&A 4 covers various aspects related to the calculation of transition effects for pension schemes under the Future Pensions Act. Key points include using realistic calculations based on pension policy, determining effects for specific groups, utilizing tailor-made individuals for insights, considering cash flows in market value determinations, applying a mapping system for investment portfolios, and accounting for status changes and demographic developments.