The World Gold Council (WGC) is said to be concerned about the decision by the Dutch Central Bank (DNB) to force the SPVG pension scheme to sell off its gold

Last month SPVG, which has just over 1100 members, was told by a court to sell its gold after it had initially opposed the DNB's instruction.

According to George Milling-Stanley, managing director of government affairs at the WGC, the organisation would like the DNB to be "at least as transparent about its motivations as the pension scheme has been" and that it would be open to a dialogue with the bank over the decision.

He told Pension Funds Insider that the decision of the Dutch central bank was at odds with the trends that are currently at force.

According to Milling-Stanley, an increasing amount of central banks worldwide are attaching more importance to gold's monetary role. The same goes for long-term investors, many of whom are increasing their exposure to gold.

"With all these things happening in the market this makes the DNB decision a very unusual one," he said.

"We are concerned because research suggests that a strategic allocation to gold, in single digits in percentage terms, can be very helpful and beneficial to the long term goals of a pension fund."

Pension Funds Insider had been led to believe that the WGC was trying to establish if the bank had any other reasons for pushing through the forced sell off, but Milling-Stanley said that he was unaware of any talks taking place between the WGC and either of the two parties involved.

"We would be open to discussions but there isn't currently a face-to-face dialogue at all, with either the pension fund or with the bank," said Milling-Stanley.

SPVG has stated that the gold was kept as a security against the instability of the Euro and that there is only one obligation which the scheme has to consider; paying members upon retirement. It said that it had no 'risky' investments and held gold as a back-up against the dangers of a turbulent Euro market and rising inflation.

The scheme's other assets are invested in government bonds, mostly German and Dutch, with 2% invested in currency.

"SPVG has been very public and very transparent in its thinking behind the decision to make this particular allocation," added Milling-Stanley.

"We think it would be very helpful to the public debate if DNB would be as transparent. This would facilitate what we think would be an appropriate public discussion about the decision, rather then it being just a court ruling.

"We are not demanding it, but we would certainly encourage them to do so."

azeevalkinik@wilmington.co.uk

First published 16.03.2011