14 November 2018

Dutch pension funds: will amendment to bill result in fiduciary management ban?

When the Second Chamber of the Dutch parliament adopted the 2019 Pensions Collection Bill, it also adopted an amendment about outsourcing activities. According to the amendment’s explanatory memorandum, the amendment will lead to a ban on fiduciary management. The amendment itself determines that asset management can be outsourced, but not the responsibility for it. As existing legislation already provides that this responsibility may not be outsourced, the Minister of Social Affairs and Employment believed at the time of presentation that the amendment was unnecessary. The question now arises whether the amendment as adopted will have any consequences for the pension fund sector. Our interpretation is that the amendment and the explanatory memorandum highlight that sufficient knowledge and capabilities must be available in a pension fund’s own organisation to control the outsourced asset management processes. The pension fund may not depend on a third party for this. We recommend that you track the legislative process, as it will provide more insight into the scope of the amendment.

This article is only available in Dutch, click here to read it.