Regulatory Alerts2023-06-29
Exploration of the Grey Area within DC Schemes
The Dutch Authority for the Financial Markets (AFM) issued an exploration revealing that approximately 70% of active Defined Contribution (DC) participants contribute premiums of 10% or less, resulting in significantly lower pension accruals compared to the fiscal maximum. The analysis highlights that many participants, particularly those under 30, face the risk of inadequate retirement income due to low premium percentages and increased franchises, creating a 'grey area' of insufficient pension building. The AFM urges the pension sector to engage in dialogue on responsibilities to prevent unrealistic expectations and ensure cost-efficient, understandable pension schemes.
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