Pension providers follow the regulations too strictly when handling complaints. Their view is too legal and they show too little leniency in dire circumstances.
That is what ‘pensions ombudsman’ Jeroen Steenvoorden concludes on Thursday at the presentation of his annual report for 2021† People can contact him after they have gone through the complaints procedure of their own pension provider.
There is still a lot to improve in those internal complaints procedures, Steenvoorden says in an explanation. He still sees too often that “complaint handlers try to get their legal right”. They are often right, according to the letter of the law and the regulations. “But sometimes it concerns distressing situations that could never have been intended when those rules were drawn up.” That is why his appeal is: “Look at it more through the human lens, with empathy.”
Steenvoorden (61) started as a pensions ombudsman in November, after a career in the financial and pension world. The institute he represents is part of the Social and Economic Council (SER) and is paid by the pension funds and insurers. Last year Steenvoorden and his predecessor Henriëtte de Lange dealt with 122 complaints.
Two tons of loss
NRC recently described the pension complaint of a 65-year-old nurse. His pension fund, Zorg en Welzijn, for many years suggested to him that benefit amounts were too high. On explicit questions, he was repeatedly told that the amounts were correct. But in the end his expected pension was nevertheless reduced, by almost two hundred thousand on balance.
Also read: Sorry, our mistake: you get two hundred thousand less pension
Zorg en Welzijn dismissed his complaints about this, and a call for leniency by the pensions ombudsman, referring to the rules. But after the publication in NRC, the pension fund still admitted that it “got stuck”.
A typical example, according to Steenvoorden. “The executor made mistakes here and should have applied more leniency.”
The ombudsman believes that pension funds and insurers should critically screen their departments that handle complaints. “I sometimes say: if you admit a mistake on TV, you should have done it much sooner. It is of course crazy that you continue to look at complaints in a very legal way until the media comes along.”
Need more guidance
In his first months as ombudsman, Steenvoorden also noticed how often complainants had regretted choices they made themselves. Notorious is the choice people are allowed to make in the run-up to their retirement date to waive the ‘partner’s pension’ – which your partner receives upon your death – in exchange for a higher retirement pension for yourself. You can only make that choice once. Steenvoorden: “But people regularly report who want to reverse this choice.”
That is why pension providers should provide their participants with much better guidance in making such choices, he believes. This starts with a selection form that clearly explains what the different options mean for you personally. With amounts.
It is even better to speak to people in person, as metal fund PMT has done for a while. “Anyone who went for the standard choice there was given an interview with additional explanation,” says Steenvoorden. And what turned out? 35 percent of those people subsequently made a different choice. “That means that the process is not yet clear enough. PMT was able to use this knowledge to improve the process.”
More options
After the pension reform that funds and insurers want to implement in the next five years, personal guidance will become even more important, says Steenvoorden. Then employees and pensioners will have extra options, the consequences of which they will not always foresee.
For example, people will soon be able to withdraw 10 percent of their pension assets at once around their retirement date. Budget institute Nibud already warned that this could lead to disappointment, especially for people with a low or middle income. They can suffer a lot of tax disadvantage and risk recovery of benefits. Steenvoorden: “This requires good guidance.”
At the same time, personal guidance can be expensive for pension providers, who are under constant pressure to keep their costs as low as possible. But this also allows them to save costs, says Steenvoorden. “If you do it right the first time, you don’t have to fix mistakes and you have to deal with fewer complaints.”
And, he says: “Good communication and guidance can increase trust in the system.”