You are involved in the IORP review. Why is that important?
"Because this dossier is ultimately about whether Europeans will soon have a decent pension. This is relatively well regulated in the Netherlands, but hardly at all in many other countries. There, people are often completely dependent on the state, and those systems are under pressure due to an aging population. If countries will soon be unable to pay their bills, that will become a European problem. At the same time, Europe is looking for ways to invest more in its own economy. Pension funds play a key role in this. This file sits exactly at that intersection of social security and economic development."
What exactly is IORP, in plain language?
"It's the European ground rules for supplementary pensions through your work. So everything that happens in the Netherlands in the second pillar - think pension funds, employer schemes - is covered. It deals with things like governance, supervision and how investment decisions are made. It's not a blueprint that prescribes everything, but a framework within which countries can set up their own systems."
Why is Europe coming up with this now?
"You see two developments coming together. On the one hand, an aging population: in many countries there is a threat of old-age poverty because people are not building up enough pensions. On the other hand, there is an economic agenda: Europe wants to be less dependent and invest more in energy, defense and innovation, for example. Pension funds have capital and a long horizon, so they automatically become part of that discussion."
So is this mostly about pensions, or also about the economy?
"It's both. The European Commission explicitly links this to the Savings and Investments Union. That means: better pensions for citizens as well as more capital for the European economy. But you have to be careful with that. Pensions are first and foremost people's own money, accumulated over a working life. It is deferred salary. You have to avoid seeing it primarily as an instrument to achieve economic goals."
Can pension money actually help make Europe stronger?
"Yes, but indirectly. If you have a good pension system, it automatically creates a large pool of long-term capital. That is invested in companies, infrastructure and innovation, among other things. To do that, regulations do have to give pension funds enough room to invest responsibly for the long term. But that only works if the system is first and foremost good for participants. So the order is important: ensure a solid pension first, followed by the economic impact."
Where do you think the biggest challenge is in Europe?
"That in many countries there is simply no good supplementary pension system. The discussion now is often about improving existing funds, but the real challenge is in countries where hardly anything has been built up. There you have to start with the basics: how do you set up a system that people trust and actually participate in?"
What makes the Dutch system so special?
"An important element is that participation is largely automatic. If you work, you build up a pension. As a result, we have broad coverage and large funds. That provides stability and scale. But that model has grown historically and is politically entrenched. In other countries it is more difficult to oblige people to set aside part of their income, especially if incomes are lower. In any case, reforms in other countries will take time."
What does this mean for the Netherlands? Should we be concerned?
"Not directly, but we have to stay sharp. Europe must leave room for national systems that work well. The risk is in overregulation: that rules come in that are counterproductive for Dutch practice and do not concretely benefit the development of systems in other countries. Look at the asset management side, for example. It is important that the framework provides enough flexibility to make investment decisions that fit the demographics and characteristics of a fund. If we make this too strict on the front end through strict regulations, long-term returns will be unnecessarily restricted. At the same time, we have an interest in other countries improving their systems. That contributes to stability as well as better capital markets in Europe."
More attention is coming to transparency. Is that a good development?
"Basically, yes. People need to be able to see what they are building, what it costs and what to expect. That's essential for trust. But it has to be done in a way that is understandable and workable. If you make it too complex or introduce the wrong equations, it can backfire. Especially in collective systems such as in the Netherlands, you have to handle this carefully. So that transparency does not lead to short-term behavior at pension funds."
Do you also see opportunities for us?
"Absolutely. The Netherlands has a lot of knowledge and experience in this field. We can use that in Europe, for example in setting up new pension structures in other countries. There is also an economic opportunity: if more countries develop supplementary pensions, there will be a larger market for asset management and services."
When is this revision a success and, most importantly, what should not be done?
"If more people in Europe actually build up pensions in the second and third pillars. In the end, it's not about rules on paper, it's about practice. If participation grows and people get more financial security, then you have really achieved something. What I don't want is for us to see pensions as some kind of policy instrument for Europe. It should always start with the participant. If you lose sight of that, you undermine confidence in the whole system. Without trust, no pension system works."
