1. Private Pensions in the Netherlands Dirk Witteveen Chairman of the Dutch Pensions and Insurance Supervisory Authority IAIS Annual Conference Santiago, Chile 9 October 2002

2. Programme The Dutch pension system Organisation of supervision Market fall and / or stability Conclusions

3. The Dutch pension system Historical overview –19th century: charity and family care –First half 20th century: organised solidarity Insurance side: mutuals –1950s: Occupational pension arrangements Solidarity Pension as social contract Facilities by government –1957: General Old Age Act

4. Result Stable pension system - low risk for the beneficiary - no direct investment risk- 100% separation between sponsor and fund (premiums not invested in the sponsor) - in fact indexed and low costs through mutual pension funds Defined benefit pension Pension is purchasing power –improves social stability/improves financial stability/enhances competitiveness

5. Traditional supervision: High level of self-regulation –Supervision concentrated on funding Fit-and-proper test of board

6. Supervision Shift towards more stringent supervision –Financial importance of pension funds –Decrease of implicit solidarity –Increased transparency –Risk management –Asset management –Inflation risk

7. Fall in the equity markets Equities fallen drastically –Average funding still over 100% –PVK decided to tighten regulation Possible measures –Raising premiums –Waiver of indexation –Different alternatives ask (mutual) guarantees, deferred loans or extra sponsor funding –To be clear- a shift of the investment risk from the pension fund itself to the beneficiary is to my opinion adverse

8. Concluding remarks A pension system should be based and judged upon the social and historical context of a country Good and fair pensions contribute to a stable society and a competitive economy Good and strict supervision is part of a sound pension system There is work to be done including co-operation, exchange of views and best practices