Dutch pension funds are supportive of the European Commission’s (EC) open finance framework initiative, provided safeguards are put in place, according to the Dutch Federation of Pension Funds.

The EC is currenting working on a legislative proposal for the mandatory sharing of personal data with financial services with third parties and is due to discuss the role of pension funds with the federation.

In a position paper on the open finance initiative, the federation called for pension data sharing in the framework to build on pension tracking services by allowing their sub-sector data standards and data sharing through intermediaries.

The federation noted that second pilar occupational pension funds are atypical, non-profit organisations that have strict regulation on giving financial advice and are not allowed to offer additional products on the basis on incoming open finance data.

Due to the minimal harmonisation of legislation, there is a wide variety of pension systems, which makes data difficult to interpret and compare, the federation added.

These complexities and differences have resulted in the federation calling for the open finance framework to have certain safeguards in place.

“In short: Fair compensation for data holders is needed,” the federation said.

“To maintain trust, data users should be licensed, under financial supervision and held to high communication standards.

“Considering the sensitivity of data, consumers should give explicit consent and only data that are necessary for a certain use case should be shared.”

The Dutch Federation of Pension funds called for a phased approach to the introduction of a framework, alongside allowing for sector-level cooperation, fair compensation, a level playing field and strong data security.

It also recommended against the use of open pension data in creating personal risk profiles and stated that open finance data users should face requirements to adequately advise on pension products when comparing financial products.

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