Towards a Barrier-Free Complaint Procedure

Towards a Barrier-Free Complaint Procedure
Investigation by the AFM into complaint procedures and complaint handling at pension funds Publication date: 27 February 2024

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Key Message
Following the entry into force of the new Pension Act, the AFM has conducted an initial investigation into the internal complaint procedures of pension funds. This initial measurement (baseline measurement) shows that most pension funds have started working on the new requirements applicable to complaint procedures, but improvements still need to be made.
One of the findings is that more than 100 of the 145 pension funds currently do not apply the statutory definition of a complaint ('any expression of dissatisfaction') on their website and/or in their complaint regulations.
1 Although the legislation regarding complaint procedures is relatively new in the Pension Act, the AFM calls on pension funds, based on these findings, to include the correct definition of a complaint in their complaint regulations and communications to participants in the short term. If a definition of a complaint that is too limited is used, this may create an unnecessary barrier for the pension participant to express their dissatisfaction to the pension fund. For example, because the pension participant thinks their dissatisfaction is not a complaint. Or, for example, because the participant must first call to discuss whether their dissatisfaction constitutes a complaint. This can be perceived as an unnecessary barrier in the complaint procedure. It can also result in not all expressions of dissatisfaction being handled according to the complaint procedure, meaning the participant is not, for example, informed about next steps in the complaint procedure. Both the new broad definition of a complaint and the transition can lead to an increase in the number of complaints. The AFM understands that not all complaints are submitted as a result of something the pension administrator has or has not done. However, all complaints provide insight into what participants are dissatisfied with, offering opportunities for the pension administrator to improve the relationship with the participant. Participants must be able to trust a complaint procedure that is designed in their interest, especially with the transition approaching. The AFM requests extra attention for the following components when improving the complaint procedure:
1 Pension funds in liquidation or those without a website were not included.

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• Definition of a complaint: Avoid restricting the statutory definition of a complaint, such as limitations on the subject matter of the complaint or limitations on which channels an expression of dissatisfaction is considered a complaint. These restrictions are not always included in a definition or description of a complaint with bad intentions, but they can discourage a participant from lodging a complaint. The AFM also observes that some pension funds restrict broad definitions on paper in practice (see chapters 1 and 3).
• General description of the complaint procedure: It must be clear to the participant what they can expect when during the complaint procedure. This means that a clear general description of the complaint procedure is included on the website. This is going well for most pension funds (see chapter 2).
• Communication on next steps: Actively inform the participant about the next steps during the complaint procedure (see chapter 3). This could include mentioning when the participant will receive a response and what they can do if they disagree with the response. Since 1 January 2024, the participant must also be informed about the dispute resolution body in certain cases.
• Safeguards: Design procedures and measures in such a way that they ensure complaints are handled carefully, verifiably, consistently, and within the set deadline. The AFM observes that pension funds can think more explicitly about how they guarantee this and that procedures and measures can be better documented, for example, in internal working agreements.
  It is also advisable to make good agreements in the chain (see chapter 4).
• Learning from complaints: Information from complaints is valuable for pension administrators. Complaints provide insight into what participants are dissatisfied with and thus offer a chance to improve the relationship with participants and increase trust in the pension administrator. To be able to learn from complaints, good complaint administration and recording are essential. Based on this, a thorough analysis of the registered complaints can be conducted to find any red thread in the received complaints and possible points for improvement (see chapter 5).
  The AFM calls on the pension sector to check to what extent they comply with the law and to make adjustments where necessary. The insights from this report can be used to further improve the complaint procedure.

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Table of Contents
Key Message 2
Table of Contents 4
Introduction 6
Reason for investigation 6
Research methodology 6
Relationship with March 2022 report 7
1 Update your procedure 8
1.1 A complaint procedure without barriers 8
1.2 A low-threshold definition of complaint 9
1.3 The correct definition of dispute 10
1.4 Outdated complaint regulation? 11
2 Ensure an accessible description 12
2.1 Presence of the general description 12
2.2 A good and easily findable location for the general description 13
2.3 Understandable for your participant base 14
3 Ensure adequate complaint handling 15
3.1 Classify all expressions of dissatisfaction as complaints 15
3.2 Inform the participant clearly about next steps 16
3.3 Communicate clearly and guide the participant in the complaint process 16
3.4 Ensure a good conclusion to the complaint procedure 16
4 Establish safeguards 18
4.1 Careful, verifiable, consistent, and timely 18
4.2 Make agreements in the chain 19
5 Learn from complaints 20
5.1 Good complaint administration is essential 20
5.2 Conduct analyses 20

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5.3 Reporting on complaints 20
5.4 Improve based on complaints 21
Conclusion 22

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Introduction
Reason for investigation
The pension sector began a large-scale systemic reform on 1 July 2023. The transition to the new pension schemes has an impact on participants, former participants, and other entitled parties and pension beneficiaries (hereinafter: participants). It is important that participants are heard sufficiently when they express their dissatisfaction to their pension administrator.
The legislator has, briefly summarized, included in the law that pension administrators must ensure adequate complaint handling and must have an internal complaint and dispute procedure (Article 48b of the Pension Act (hereinafter: PW) and Article 59b of the Mandatory Occupational Pension Scheme Act).
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In the Decision on the Implementation of the Pension Act and the Mandatory Occupational Pension Scheme Act (hereinafter: BuPw), among other things, a definition of complaint and dispute is included, and it is determined that the pension administrator makes a general description of the complaint procedure available to the participant, maintains a complaint administration, and handles complaints within a reasonable time frame. 3 An adequate complaint procedure is in the interest of the participant. This is reason for the AFM to conduct an investigation into this. Moreover, it is precisely around the transition to the new pension schemes that it is important that participants are heard and that any concerns or dissatisfaction are removed in an appropriate manner, where possible. Research methodology The AFM conducted an investigation into the compliance of pension funds with the new legislation and regulations regarding the internal complaint procedure. The new legislation and regulations focus on complaints from participants, not on complaints from, for example, employers. This research is split into two phases. These are explained below. Phase 1: General description of the internal complaint procedure In the first phase of the investigation, the AFM assessed at 149 pension funds whether the general description of the complaint procedure was made available to participants, whether the information was findable, and whether the information was understandable. Between early July and mid-August 2023, the websites of the pension funds were assessed. At 29 pension funds, the AFM did not find a general description of the complaint procedure on the public website. This may be because it was not (well) findable, because the public website had not yet been updated, or because the pension fund shares the information with the participant in another way. These 29 pension funds received a request for information. The relevant findings from this phase of the investigation are included in chapter 2. During the assessment of the general description of the complaint procedure, it struck the AFM that the definition of a complaint mostly did not yet meet the new legislation and regulations. In September, the AFM called on the sector in the Transition Bulletin to update the complaint procedure and the definition of a complaint. In November and December, the definition of a complaint was assessed again. This time, the AFM included both the complaint regulation and the website for all pension funds where possible. The AFM chose to investigate immediately after the entry into force of the new rules to what extent pension funds comply with the rules, given the importance for participants. The findings are included in chapter 1, in which the AFM calls for updating the internal complaint and dispute procedure. The investigation shows that the majority of pension funds do not yet fully comply with the new rules. Because this is a new norm, the AFM chooses not to take
immediate enforcement action but to provide clarity in this report. The AFM will conduct a follow-up control at a later moment. Phase 2: The functioning of the internal complaint procedure In the second phase of the investigation, the AFM requested information from five pension funds regarding the functioning of the complaint procedure and the way learning from complaints is conducted. The information request sent by the AFM consisted of a questionnaire and a request to send a number of complaint files. Subsequently, the AFM held an in-depth discussion with these pension funds. Additionally, the AFM spoke with four pension administration organizations (hereinafter: PAO). The AFM shares a number of recommendations and good practices with the sector in this report based on the investigation into the functioning of the internal complaint procedure. Chapter 3 addresses adequate complaint handling, starting from recognizing a complaint to closing a complaint. Chapter 4 addresses how the complaint procedure can be designed so that complaints are handled carefully, verifiably, consistently, and timely as described in Art 14k BuPw. Finally, chapter 5 contains how learning from complaints can be done so that the complaint procedure is improved, but also so that the experience of participants with the pension fund in general can be improved. Relationship with March 2022 report The AFM previously conducted a scoping study into complaint handling by pension funds and published a report on 18 March 2022. This earlier scoping study was conducted before the statutory provisions regarding the complaint procedure were included in the PW and the BuPw. Based on its 2023 investigation, the AFM concludes that the sector has started working on the earlier recommendations, but that there is room for improvement. Recommendations and good practices were provided in the 2022 report. Those recommendations and good practices are still relevant and have in part been anchored in the new rules that entered into force on 1 July 2023.

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1 Update your procedure
The AFM's investigation shows that of the 145 pension funds investigated, 101 pension funds need to adjust the definition of a complaint in one or more places. At 35 pension funds, only the definition on the website is incorrect, and at 24 pension funds, only the definition in the complaint regulation is incorrect. At 42 pension funds, both definitions are incorrect.4 Some pension funds may use the broad definition of a complaint in their internal administration. However, when a pension fund communicates a different, less low-threshold definition to participants, this can prevent participants from lodging a complaint, and there is a barrier in the complaint procedure. Below, the AFM addresses the correct definition of a complaint and the correct definition of a dispute in sequence. But first, the AFM addresses the importance of a complaint procedure without barriers.
1.1 A complaint procedure without barriers
It is important that participants do not experience barriers when lodging a complaint. When participants can lodge a complaint with low thresholds, this has several advantages. First, this enables the pension administrator to try to resolve the dissatisfaction at the participant. This lowers the chance of escalation of the complaint and ensures a greater chance of an outcome where both the pension administrator and the participant are satisfied. This is good for trust in the pension fund and the pension sector. Second, the pension administrator receives valuable information via complaints about where participants encounter problems. This gives pension administrators the chance to improve their communication and service delivery and to detect and correct errors in a timely manner. Both the new broad definition of a complaint and the transition to the new system can lead to an increase in the number of complaints. The AFM does not necessarily view a large number of complaints as negative. This can actually be an indication that the pension administrator is easily accessible by participants. Additionally, the AFM also understands that not all complaints are submitted as a result of something the pension administrator has or has not done. However, all complaints provide insight into what participants are dissatisfied with, offering opportunities for the pension administrator. When a complaint concerns general sentiment ('why is my payout not indexed'), this can still yield valuable information regarding, for example, broad communication to participants. Another example is a complaint from a participant that they have no insight yet into what the participant personally can expect during the transition. A pension administrator can only provide personal clarity after going through a process. A pension administrator has not done anything to cause the complaint, but can still use the information to proactively provide or make available certain information to participants. For example, by sending an informative letter or making Q&As available on the website. Complaints provide insight into what participants are dissatisfied with. This offers possibilities for the pension administrator to improve the relationship with the participant. 4 This follows from a control by the AFM in November and December 2023.

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1.2 A low-threshold definition of complaint
The legislator deliberately formulated the definition of a complaint broadly to make the complaint procedure low-threshold. A complaint is, according to Article 14f BuPw, 'any expression of dissatisfaction that a participant, former participant, other entitled party, or pension beneficiary directs to a pension administrator'.
In its investigation, the AFM observed that the complaint definitions used and information about the complaint procedure limit, among other things, the subject matter on which participants can lodge a complaint. This also applies to the time for lodging a complaint or the manner in which a participant can lodge a complaint. With a complaint definition that is too limited, the complaint procedure does not (fully) comply with the new statutory requirements. This can have two undesirable consequences. First, the participant may be discouraged from lodging a complaint. For example, because they think their dissatisfaction is not a complaint. Second, it can result in not all expressions of dissatisfaction being handled according to the complaint procedure, meaning the participant may suffer disadvantage (they are not, for example, informed about next steps in the complaint procedure). When recording complaints is limited, the pension administrator also misses opportunities to learn from them. The AFM calls on the sector to prevent both consequences as much as possible. For this, it is important to use the correct definition of a complaint. Using the statutory definition is certainly correct. Phrasing it differently, more accessibly, is also allowed, provided the definition is not restricted. Two examples of this are:

• Lodging a complaint? Let us know if you are not satisfied with something.
• We handle every expression of dissatisfaction according to our complaint procedure.
  Below are examples of definitions used that the AFM does not consider correct. It is also indicated what the consequences for the participant can be. Additionally, the AFM also observed definitions that were incorrect in multiple respects.
  Restriction of the subject matter of a complaint Various complaint definitions have a delimitation regarding the subject matter on which the participant can lodge a complaint (for example, if it only concerns service delivery or if something is explicitly excluded from the definition of a complaint). When the definition of a complaint is clarified with examples of what a complaint can concern, this is not incorrect, as long as it is prevented from being perceived by the participant as a delimitation. Sometimes the incorrect definition is complexly described by limiting the subject matter of a complaint. This can be perceived by the participant as unnecessarily restrictive. Examples of such restrictive definitions are:
• Definition of complaint: an expression of dissatisfaction regarding the manner in which pension legislation, the statutes, or a regulation of the pension fund is or will be applied, whereby the participant takes the position that their rights vis-à-vis the pension fund are or will be harmed.
• You can lodge a complaint if you are dissatisfied with the following topics:
  a. The executive tasks of the fund. We understand by this activities related to:
• Assessing and establishing pension entitlements;
• Assessing and establishing the right to a payout or provision;
• Establishing and collecting premiums and/or contributions to be paid;
• Registering personal data for the execution of the scheme;
• Supporting the aforementioned tasks.
  b. Application of the statutes and/or regulations, or
  c. The manner in which you were treated by the fund.
  Some definitions delimit the definition of a complaint by distinguishing between different terms, which can also be unnecessarily confusing for participants. For example, by dividing expressions of dissatisfaction into complaint and dispute or complaint and objection:

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• Are you not satisfied with our service (a complaint) or do you disagree with the manner in which we execute the pension regulation (a dispute).
• You have a complaint if you are dissatisfied with how you were treated or informed by us. You have an objection if you believe we are not applying the pension scheme correctly. A different procedure applies here.
  Restriction of the manner of lodging a complaint It is possible that pension funds want to streamline the manner in which complaints come in. That is allowed. However, it is not allowed to not classify complaints that arrive via a different manner than prescribed as complaints, for example, when a complaint is expressed in a conversation with the pension fund board member or on their own social media channels. Every expression of dissatisfaction from a participant directed to the pension administrator must be treated and registered as a complaint. Examples of too limited definitions are:
• A complaint can only be submitted in writing. Verbal expressions of displeasure are not classified as complaints.
• Definition of complaint: a written or digital expression of dissatisfaction directed to the fund.
  Restriction of the period for lodging a complaint Restrictions in time within which a complaint can be lodged are also原则上 not allowed. A participant cannot, for example, be expected in all cases to lodge a complaint within so many weeks after receiving information. Sometimes it only becomes clear to the participant at a later moment that something is not correct or that they did not understand something. This applies, for example, when a participant waits to study information until it is relevant to them. Another example is when a participant compares two UPOs (Uniform Pension Overview) and concludes that the old UPO from a year ago was incorrect. Even then, the participant must be able to lodge a complaint about this. Limited applicability of the complaint procedure We also see complaint procedures where not every expression of dissatisfaction is described as a complaint. For example, because a complaint is not initially registered or treated as such, or because something is only a complaint if it is actually handled internally. The participant has the right that all their expressions of dissatisfaction are classified and treated as complaints. This gives the pension administrator the chance to resolve the dissatisfaction and to learn from the complaint. Examples of definitions from which a too limited applicability of the complaint procedure can be derived are:
• You may be dissatisfied. Can't you resolve it with the helpdesk? Then you can lodge an official complaint.
• In special situations, our board decides whether a complaint or other expression of displeasure is taken into handling by us.
  Other
  Finally, we also see documents or websites where different complaint definitions are used. Or where texts regarding when something is a complaint are not consistent with each other. For the participant, this makes it difficult to determine whether something is or is not a complaint, and this can be perceived by the participant as a barrier.
  1.3 The correct definition of dispute
  A participant may consider taking a dispute to the dispute resolution body (or ombudsman). It is important that the definition of a dispute is communicated correctly and clearly to the participant. When a pension administrator uses an incorrect definition of a dispute, this can result in the participant

11 Towards a Barrier-Free Complaint Procedure incorrectly thinking that they have a dispute with which they can go to the dispute resolution body. This can cause unnecessary frustration for the participant when the dispute resolution body must disappoint the participant. E

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