NMa sheds light on applicability of the Dutch Competition Act for pension funds

The Netherlands Competition Authority (NMa) has today published the 'Implementation regulation on pension funds', stating that all pension funds are considered undertakings within the meaning of the Dutch Competition Act. As a consequence, the Competition Act applies to these funds, including its ban on cartels, the abuse of a dominant position, as well as the regulation of concentrations.

The implementation regulation has removed the uncertainty about the Competition Act's applicability for Dutch pension funds. Both industrywide and occupational pensions funds had already been designated as undertakings within the meaning of the Competition Act, based on jurisprudence of the European Court of Justice. With the publication of this implementation regulation, the NMa has provided clarity by stating that the Dutch Competition Act also applies to company pension funds.

Pension funds are considered undertakings because they engage in economic activities. Pension funds manage pension schemes where the level of the individual benefits depends on contributions and on the performance of the investments. Moreover, the government offers these funds, as well as the trade and labor unions a considerable degree of freedom in setting their pension contributions, their benefits, their investment policy, and their indexation policy.

As part of the regulation of concentrations, it has also been laid down in the implementation regulation that the turnover of pension funds will be determined using the gross contributions booked in the previous year. In contrast to, for example, banks and insurance companies, the Competition Act itself does not specify how the turnover of pension funds should be calculated. The NMa needs to be notified of any concentration between two pension funds if the funds involved have paid more than €113,450,000 in gross booked contributions in the previous year and if each of the pension funds involved receives at least €30 million in gross booked contributions from Dutch employees. Given these turnover thresholds, the NMa expects to be notified of only a few concentrations that involve pension funds.

When reviewing mergers and acquisitions, the NMa assesses whether effective competition in the market is significantly impeded, particularly when a dominant position is created or strengthened. Such a position can have negative effects on prices, quality and range of the products or services in question. Taken into account here is the fact that competition among pension funds is currently limited.