Again, we see that simplicity and ease of use are top of mind with Dutch respondents (81%). The ability to access advice is also highly valued, with 76% of people surveyed stating that this is likely to be either extremely or very important to their members.
However, there seems to be a vacuum in the Netherlands regarding member advice. Plan providers, including Dutch pension funds, insurers and master trusts, have gradually stepped away from providing pension advice as a result of cost efficiency and duty of care issues. Independent financial advisors are no longer allowed to include advice as an integral part in the solution but—following regulatory changes—have to price advice separately at market rates. The Dutch government has no key role in occupational pensions.
Members are increasingly in need of advice because the existing defined benefit (DB) and CDC pension plans are complex and underperforming, and members change jobs more frequently. But they are not willing to pay for that advice.
The way forward in the Netherlands seems to lie in providing educational sessions/seminars on the different retirement options available to members, paid for, initiated and hosted by plan sponsors and/or social partners (i.e., trade unions, employers’ associations). Consultants and service providers such as asset managers should look at how they could best support plan sponsors in these initiatives.
Doing Good and Doing Well
Fully 73% of plan sponsors said they felt that it was important to incorporate environmental, social and corporate governance (ESG) considerations into their plan’s investments, compared with a 70% average across all other countries surveyed. In addition, 73% of Dutch plan sponsors said plan members value ESG investing. This is somewhat higher than in other countries (64%), and fits with the Dutch view that ESG is a useful method to engage members.
Despite widespread appetite for ESG, it is not necessarily incorporated fully into pension plans. Cost and limited product availability were the two main reasons for lack of adoption. We believe that as more products become available, the positive attitude towards ESG will result in an even more rapid adoption within Dutch pension funds and master trusts. (42%).