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Operation of a Dutch pension scheme by a pension institution from another Member State: Budapest Protocol
Dutch employers are permitted to outsource their pension scheme to a pension institution from another Member State. This pension institution must nevertheless meet a number of conditions. Furthermore, Dutch law continues to apply partially in such cases.
A pension institution from another EU Member State can operate pension schemes for employers in the Netherlands. These pension schemes are governed by the social and labour law of the Netherlands.
De Nederlandsche Bank (DNB) is notified by the supervisory authority in the other Member State if a pension institution from that Member State wishes to operate a Dutch pension scheme. That supervisory authority will already have issued a cross-border licence and assessed whether the local pension institution concerned is able and permitted to operate the Dutch scheme.
We then forward the following information to the supervisory authority in the pension institution’s home Member State:
- an overview of Dutch social and labour law
- the applicable Dutch information obligations
The pension institution from the other Member State must adhere to these requirements when operating the Dutch pension scheme.
The social and labour law broadly concerns everything agreed in the relationship between the employer and the employee. The Netherlands itself determines the content of its own social and labour law.
The supervisory authorities from the two Member States concerned share the supervision of the Dutch activities of a pension institution from another Member State. The supervisory authority from the other Member State supervises the fund’s financial position. The Dutch supervisory authorities (DNB and AFM) supervise compliance with social and labour law and disclosure requirements.
If DNB finds that the pension institution from the other Member State is contravening the applicable social and labour law, DNB will inform the supervisory authority from the other Member State. That supervisory authority must then intervene.
If the pension institution from the other Member State continues to violate the Dutch social and labour law applicable to the pension scheme, despite the measures taken by the supervisory authority from the other Member State or because that supervisory authority has not taken any appropriate measures, DNB can take appropriate measures to terminate the violation of the applicable regulations by the pension institution. DNB must nevertheless inform the other supervisory authority of its intention in advance. If necessary, DNB may prevent the pension institution from the other Member State from conducting activities for the Dutch contributing company.
- Pension funds