Given the developments in the financial sector, the need for and benefits of a well-designed plan are as high as ever.
Half the examined plans were found to be satisfactory or good. The other half, however, emerged as unsatisfactory or poor. Especially the following aspects of the finnacial crisis plans are in need of improvement:
- clear prioritization of remedial measures
- clear and explicit timing of pension curtailments
- anticipation of contingencies in decision making processes
- clarity on what, when and how the pension fund is to communicate to its members
- implementation of the requirement to ensure balanced consideration of interests.
A financial crisis plan contains measures and procedures that come into effect during an crisis. It provides clarity to the fund's Board and members as to what should be done in a crisis situation. In 2011, DNB encased its policy in a Policy Rule on Financial Crisis Plans of Pension Funds because many funds turned out to be ill-prepared for a profound crisis. Funds had until 1 May 2012 to draw up a financial crisis plan. Nearly all funds now have plans.
The chart below presents the quality of the examined financial crisis plans.