NETHERLANDS - A bill has been introduced into the Dutch Parliament that would open the Netherlands to the IORPS market.
It is expected to pass parliament and go into effect September 2009, according to a statement from the Ministry of Finance.
The PPI will essentially be a Netherlands-based defined contribution retirement vehicle for multi-national companies. It is the first step in introducing a risk-bearing general pensions institution, an Algemene Pensioeninstelling (API) which would allow defined benefit schemes to participate.
The creation of a PPI is the result of an IORPS (Institutions for Occupational Retirement Provisions) directive - a European Union effort to create cross-border retirement systems.
For example, a company with employees throughout Europe could pool their pension assets into one IORPS vehicle as opposed to running separate schemes in separate countries.
The PPI itself will have no solvency requirements and has low capital requirements. Because the PPI can not take on solvency risk, it is best suited for DC plans, as opposed to a DB plan which can have solvency issues.
Senior European pensions consultant at Hewitt Associate Jacqueline Lommen said she expects the Dutch PPI to compete with IORP vehicles offered in Luxembourg, Belgium, Ireland and Liechtenstein- the most popular ones to date.
She said: "In the Netherlands, there's a lot of pension knowledge and this could not (previously) be exported because we did not have a vehicle."
She said large pension managers like the PGGM, manager for the Dutch pension plan PFZW, and APG Asset Management, manager for pension fund ABP, are well positioned to benefit from the creation of the PPI.
Lommen said their reputations for managing complex pension portfolios and their background as in-house pension managers will make them strong competitors.
Spokesman at ABP Thijs Steger said: "We are welcoming the introduction of this bill into the Dutch parliament, as the PPI will enable APG to service multinationals, and Dutch employers that previously could not be serviced. However, we do see the PPI as a stepping stone to the general pensions institution API."
Other pure-play asset managers have also been preparing for the creation of a new IORPS market.
Robeco chief executive George Möller added: "We are ready to go." Möller said the firm already has the infrastructure in place to offer an open-architecture suite of funds, likely life-cycle products, for their international clients.
He said the firm works with US-based corporations with offices around Europe that could benefit from having a single pension system.
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