DNB launches a consultation on the draft Good Practice ‘Integration of climate-related risk considerations into banks’ risk management’
Supervision consultation
De Nederlandsche Bank (DNB) is responsible for prudential and material supervision of pension funds, premium pension institutions (PPIs) and pension insurers. Prudential supervision focuses on the financial soundness of pension funds and their contribution to financial stability. Material supervision includes the assessment of pension funds' articles of association, pension scheme rules and pension contracts.
Pension funds which are formed in the Netherlands and limit their activities to administering Dutch pension agreements need not apply to DNB for authorisation. However, these pension funds must give advance notification to DNB. General pension funds (Algemeen pensioenfonds, APF, in Dutch) however must hold an authorisation in order to pursue the business of a general pension fund in the Netherlands. De Nederlandsche Bank (DNB) is responsible for issuing such authorisations and for supervising APFs. APFs may start operating only after the authorisation has been granted.
All pension funds must comply with several statutory requirements. On the one hand, these requirements serve to promote pension funds' financial soundness (prudential requirements), on the other they focus on control structures and the relationship between employees, employers and pension funds (material requirements). The Dutch Authority for the Financial Markets (AFM) is responsible for market conduct supervision. Together, these prudential, material and conduct requirements aim to protect the interests of pension fund members, deferred members and pensioners.
The Pensions Act – for company pension funds and industry-wide pension funds, the Mandatory Occupational Pension Scheme Act (Wet verplichte beroepspensioenregeling) – for occupational pension funds, and the secondary legislation based on these laws impose prudential requirements on pension funds in the following areas (please note that the list below is non-exhaustive):
The Pensions Act – for company pension funds and industry-wide pension funds, the Mandatory Occupational Pension Scheme Act (Wet verplichte beroepspensioenregeling) – for occupational pension funds, and the secondary legislation based on these laws impose material requirements on pension funds in the following areas (please note that the list below is non-exhaustive):
These requirements have been elaborated in greater detail in secondary legislation and concern all kinds of operational, technical and financial aspects as well as related risks.
If you have any questions about the supervision of pension funds in the Netherlands, please contact us.
More information about cross-border operation of pension schemes
Liability-Driven Investment funds (LDI funds) mainly invest in long-term government bonds and long-term interest rate derivatives. The use of these interest rate derivatives exposes LDI funds to liquidity risks in case of large interest rate fluctuations.
This week, the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have published their final reports on greenwashing in the financial sector.