BeFrank responds to proposed pension communication law

17 April 2014


In late 2013, the Ministry for Social Affairs and Employment presented its first draft of a bill to amend the Pensions Act (Pensioenwet) and the Compulsory Occupational Pension Scheme Act (Wet verplichte beroepspensioenregeling), also known as the Pensions Communication Act (Wet pensioencommunicatie). The bill aims to improve the information that pension providers give to their members, to ensure it is more in tune with their needs. BeFrank applauds this initiative and has formulated a response.

Making information provision stipulations a part of pension legislation in 2007 was an important step in improving pension communication. Yet awareness about pensions in the Netherlands remains low. Studies have shown that current communication efforts by pension providers do not always have the desired effect. The information on pensions prescribed by law is complex for many people, difficult to understand and extensive. Moreover, it paints an over-optimistic picture of the value of the pension because it does not provide any information on risks, and this can give people false expectations. What’s more, trust in the pension industry is waning among active members and pensioners.

Proposed law

The bill intends to improve information communicated about pensions by ensuring it is more in tune with the wishes of pension scheme members and is more honest about risks. It puts the focus on the interests of members. It is desirable that there is a shift from the current position to one where the focus is on the information needs and the characteristics of members and how they process information. This means that the new legislation will offer more scope for tailored communication by pension providers, more nuanced information, more opportunities to provide information electronically, as well as uniform information on purchasing power and risks. The aim is to create personalised, interactive and complete insight for all pension scheme members whenever they need it. This insight should be available at a glance and provide information on the pension income they can expect and also what the financial consequences of certain choices or changes in an individual’s personal situation might have.

Communication is a top priority for BeFrank

Since our foundation, BeFrank has endeavoured to make pensions easy to understand for everyone, and to make them generally easier for people. Members of BeFrank pension schemes can always check the current status of their pension on their personalised online pension page. Including the risks. By providing insight and offering choices, members are more in control of their pension. BeFrank is also open to dialogue, and this is one of the reasons we founded WeFrank, an online pension community. This offers employees a place to post their suggestions and vote on the ideas of others, in turn allowing BeFrank to further optimise its service.

BeFrank’s response to the proposed law

BeFrank is positive about the bill and we have therefore taken the Ministry up on its call to respond. BeFrank considers the bill as a step in the right direction to raise awareness of pensions in the Netherlands. Our response also includes some suggestions for improvements.

In brief, our response is as follows:

  1. Positive developments in terms of the simplification of communication requirements;
  2. Electronic communication should be more strongly facilitated;
  3. The periods for providing information are too broad and in some cases there are still obligations to provide superfluous information;
  4. Too much standardisation and detailed regulations in delegated legislation focusing on the communication itself and the methods to be used.