Cross-border activities of Dutch pension funds

A pension fund operating across borders is not only subject to supervision by the supervisory authorities in the Netherlands, but is also partly subject to supervision by the supervisory authority in the Member State whose social and labour law applies. The supervisory authorities cooperate to help this run smoothly, including in the European Insurance and Occupational Pensions Authority (EIOPA). The Budapest protocol includes agreements on the way in which the supervisory authorities communicate with each other and how the entire process operates.

Licence

In order to be permitted to operate across borders, a Dutch pension fund must be licensed under Section 125 of the Pensions Act. Under Sections 192 and 193 of the Pensions Act, De Nederlandsche Bank (DNB) may grant this licence to a Dutch pension fund if that pension fund meets a number of requirements. The main requirement is that a pension fund guarantees sound and ethical operational management. The licence enables the pension fund to conduct pension activities in all EU Member States.

Notification of proposed activity

Under Section 194 of the Pensions Act, a Dutch pension fund must notify DNB if it intends to operate a pension scheme in another Member State. Under Section 195 of the Pensions Act, DNB will then assess whether the administrative structure or financial position of the pension fund or the expertise or reliability of the persons managing the fund may give cause to doubt whether the pension fund is capable of conducting the activity as notified.

The pension fund must supply the following information with the notification to DNB:

the Member State whose social and labour law applies, for the purposes of occupational pension provision, to the legal relationship between the contributing company and the employees or the self-employed person designated by the contributing company in the case in question;

• the name of the contributing company and the place in which the contributing company has its main administration; and
• the key features of the pension scheme that will be operated for that company.

Informing the other Member State’s supervisory authority

If DNB has no reason to doubt that the Dutch pension fund is capable of conducting the cross-border activity as notified, DNB will forward the information received to the supervisory authority in the Member State from which the scheme originates. That supervisory authority must then provide DNB with the following information:

• The social and labour law of the other Member State.
• The information obligations applicable in the Member State.

The social and labour law broadly concerns everything agreed in the relationship between the employer and the employee. Each Member State determines the content of this legislation itself. The Dutch pension fund must adhere to the above rules when operating the pension scheme in the other Member State.