DNB expects healthy critical thinking from administrators and funds

The pressure on the early adopters to be the first to transition is mounting as January 1, 2025 draws ever closer. That is also true for De Nederlandsche Bank (DNB), which is responsible for the review process of transition notifications. The regulator expects some 70 transition notifications by March 2025. Hans de Boer, head of DNB’s department for the supervision of transition decisions therefore calls on administrators and funds to be discerning about the completeness and substantiation of the dossiers.

The transition notifications and requests for partial assessments are currently trickling in at DNB. It is the relative calm before the storm, De Boer said during the APG Summer Course (late August) in Lunteren. “There are currently ten completed transition notifications. We expect that number to rise to seventy by March of next year. He speaks of a big “task” in which a “controlled and balanced transition” is central. “But we are ready for it; we can handle this. We have nine assessment teams ready. And we are expecting a rapidly rising learning curve.”

Not sufficiently clear

De Boer is referring to the fact that on the side of administrative organizations and funds, it is becoming increasingly clear what is expected. In addition, DNB has entered into discussions with funds that have submitted a dossier. “From those conversations it became clear that for administrators and pension funds the transition template and the corresponding instructions for completion were not yet sufficiently clear. For example, funds indicated that it was not clear that all documents to which a fund refers in the transition template or in underlying documents must also be sent with the dossier. In addition, they felt that a number of completion instructions needed to be written up more comprehensibly. So, we worked on that. An improved transition template has been available since the end of August. Please use it, as DNB expects pension funds that submit a transition notification or partial assessment to use the most up-to-date version of the transition template. Another tip: ensure the instructions for completion are available throughout the organization,” De Boer urges.

Inform, guide and structure

He also points out that DNB supports administrative organizations and funds with their transition notification in numerous ways. “We inform, guide and structure. Informing is done through roundtable sessions, sharing best practices and one-on-one discussions with funds, among others. The new transition template is an example of how we are structuring the process better. And the guidance is done through expert sessions and the oral explanations of the letters. Anyway, we can do the latter now, but later, when the number of transition notifications goes up, we won’t be able to. So, there will have to be a learning curve.”

A controlled transition

De Boer therefore urges administrators and funds to share the available documentation with everyone involved with the transition template. “Secure what is already available, such as up-to-date knowledge documents and Q&As, and share them with the organization. That will benefit the process. In addition, set the bar high, be critical and don’t say yes too quickly. For example, ask yourself whether someone who has not sat at the board table for the past three years will be able to comprehend and reproduce the information, based on the information submitted, the steps taken, the considerations made and the conclusions drawn.” De Boer is counting on a controlled transition. “This requires a lot from administrators and funds, and it is a challenging time for us too. But we are doing all we can to prepare for it. We have hired additional staff. And a lot of flexibility and agility will also be required of us.”