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25 February 2019 Supervision Supervision label Q&A

Question:

May a former scheme member transfer the value of his accrued pension entitlements to a pension institution outside the EU/EEA?

Answer:

Yes, that is possible. A former member of a Dutch pension provider who wishes to have the value of his accrued pension rights transferred to a pension institution outside the EU/EEA can submit a request to the Dutch pension provider under Section 87 of the Pensions Act. The Dutch pension provider must then follow the procedure below.

A value transfer to a foreign institution is only possible if the pension provider demonstrates to De Nederlandsche Bank (DNB) that the requirements of the Pensions Act have been fulfilled. Under Section 87 of the Pensions Act the Dutch pension provider must demonstrate the following to the satisfaction of DNB:

  1. The conditions set out in Section 71(1) of the Pensions Act have been fulfilled. This means the following:
    • There is an individual termination of employment or scheme membership.
    • The former member can use the value transfer to acquire pension rights with the receiving pension provider of the new employer.
    • The partner gives consent for the value of the right to be transferred to the partner pension.
  2. The transferring pension fund has a policy coverage ratio of at least 100% or the transferring insurer is not the subject of emergency arrangements or a bankruptcy procedure.
  3. The foreign institution is subject to a form of government supervision in the country in which it is established.
  4. The assets of the foreign institution and the new employer are legally separate due to the existence of a legal entity separate from the institution, a special preferential arrangement favouring the pensioners or other means.
  5. The possibilities for redeeming the transferred pension rights are no greater after the value transfer than under the Pensions Act.

DNB requests the Dutch pension provider also to supply the name of the Dutch employer and the names of the foreign employer and the foreign pension provider when notifying DNB. The Dutch pension provider must also supply the pension regulations of the foreign pension institution.

The Dutch pension provider is primarily responsible for assessing whether all conditions for an international value transfer have been fulfilled. DNB carries out only a minimal compliance assessment and issues a statement on its findings.

sector

  • Insurers
  • Pension funds
  • Premium Pension institutions