Towards the end of 2011 the Dutch pension provider PGGM will be the first to start direct co-operation with a bank to better inform its members. With a state-led pension register going online just over a month ago in the Netherlands, is this sort of co-operation welcome?
The initiative, called 'Saving for Later', will start with a website where members of the pension provider PGGM can get an insight into their pension situation and where, if members want advice on their complete financial situation, they can get this from Rabobank. The personal details of members will only be shared with the bank if members actively ask for it and give their permission; hereby the system ensures no breach of privacy.
Diana Abrahams, a spokesperson for PGGM and PfZW, says that PGGM and Rabobank believe that the changing financial climate has highlighted just how important it is for people to get the full picture on their finances. "We have to look at more than just pensions and we have to find ways to tie pensions in with, for example, care and living costs," she says.
"The website will be our first project. We also started another project which compiles and shares knowledge on how in the future the pension system might change and what impact this has for PGGM, the Rabobank, the members and the customers," says Abrahams. She admits that more joined projects of this nature may happen in the future.
Although this agreement is the first of its kind, and by no means a sign of a direct trend, many eyes will be watching to see what such co-operation can bring to the overall health of pension fund saving.
Linda van der Heyden, a press officer at the Federation of Pension Funds in the Netherlands, says the organisation is reasonably relaxed about the deal.
"It is good for pension funds if they can be facilitated with low costs. If a provider offers more services this alternatively can be an interesting development for pension funds," she says.
Other commentators have cautiously welcomed the notion of making advice widely available to scheme members.
Mark Heemskerk, an economist, pension lawyer and senior researcher at the Expert Centre for Pension Law of the VU University in Amsterdam says: "If it leads to people being better prepared and it lets people make adjustments that are needed for later, then it looks like a good idea to me. The only risk I see is that members might get the idea that it is a commercial way of getting people to buy more products. That idea will exist because there is only one provider."
"The pension register already makes people aware of shortfalls and when they see this is happening it is likely they end up with providers from the third pillar, like insurance companies and banks, anyway. With the Rabobank as the only provider in direct sight people might be guided too much."
Kees Nanninga, a press officer of the Rabobank, says the bank is proud that it will have a chance to offer its products to over two million PfZW members. "We have a definite advantage over insurance companies. Our products have a proven track record on the market and receive a high rating," he says.
azeevalkink@wilmington.co.uk
