The Netherlands Authority for the Financial Markets (AFM) has published preliminary guidelines for pension providers on creating choice guidance for pension participants in the move to the new pension system.

The guidelines aim to help providers with the design direction and clarity on their choice guidance for members, as well as the implementation and continuous improvement of their guidance.

This set of guidelines is provisional, the AFM noted, as the Future Pensions Act is still making its way through parliament and possible amendments to the law may give rise to a revision of the guidelines.

In its accompanying letter, the AFM outlined three important points of attention for providers when setting up choice guidance.

It noted that participants differ from each other, with different needs, characteristics and skills when making pension choices.

Therefore, providing better information and ensuring the choice environment matches the member will allow the participant to make better choices.

The AFM also stated that determining a good, preferably personalised or segmented, default option was essential.

Finally, the authority noted that adequate choice guidance was a continuous process of setting up, implementing, monitoring, evaluating and, if necessary, improving.

A template document on choice guidance was published by the Pension Federation in July.

A working group within the Pension Federation is now working on a follow-up document, following the publication of the AFM’s guidelines.

The AFM’s guidelines will apply from the moment the Future Pensions Act is introduced in the summer, with the standard for guidance on decision-making also coming into effect at that time.

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