Pension fund establishes its remuneration policy

The managing board of ING CDC Pensioenfonds has established its remuneration policy for the members of its managing board, supervisory board and supervisory committee. The remuneration policy takes effect on 1 January 2017, coinciding with the implementation date of the new governance model. The remuneration is based on fees paid for similar positions in the market and on the standards for time spent published by the Dutch central bank (DNB). Efficiency gains resulting from the pension fund’s close collaboration with NN CDC Pensioenfonds have been taken into account.

When ING CDC Pensioenfonds was founded in 2014, agreements were made with regard to the remuneration of members of the managing board, the audit committee and the supervisory board for the performance of their duties. Account was taken of the fact that the new pension fund would be going through a period of transition and that the remuneration should be in line with the remuneration paid for similar duties within ING. Moreover, under the governance model that was chosen, board members of ING CDC Pensioenfonds as well as NN CDC Pensioenfonds are remunerated only once. Since the founding of these pension funds, the remuneration has not been modified.

Standards for remuneration and time spent
On 1 January 2017, a new governance model was implemented for ING CDC Pensioenfonds. Internal control is no longer carried out by an audit committee, but instead by a supervisory committee. The members of the latter are independent experts who have been recruited from outside the company. Their remuneration is in line with market practice and with the recommendations of the code pension funds. The amount is based on a full time remuneration of €135,000 per year.

Regulations have laid down standards for the amount of time spent by members of a pension fund’s managing board and supervisory committee. Under these regulations, a supervisory committee chairman is an 0.2 FTE, a supervisory committee member is an 0.1 FTE, a managing board chairman is an 0.3 FTE and a managing board member is an 0.2 FTE. There are no standards for time spent by members of a supervisory board, but the amount of time they spend and their responsibilities are similar to those of supervisory committee members.

Efficiency
Any member sitting in the supervisory committees of two pension funds at the same time would be remunerated twice based on the standards for remuneration and time spent. However, ING CDC Pensioenfonds and NN CDC Pensioenfonds work together closely. In fact, almost all of the board members of ING CDC Pensioenfonds are also members of the board of NN CDC Pensioenfonds. The supervisory committees of both pension funds have the same members. The high degree of collaboration leads to efficiency gains. In this light, the pension funds apply a multiplication factor of 1.5 to the standard amount of time spent, instead of 2.0.

Only the supervisory boards do not have any overlap among its members, as they consist entirely of employers and employees of the company in question. Although there are no standards for a supervisory board, its members’ duties and responsibilities are similar to those of supervisory committee members. As a result, their time spent is remunerated at 0.2 FTE for the chairman and 0.1 FTE for members.

Included in administration expenses
ING CDC Pensioenfonds’ remuneration policy is included in its administration expenses. These expenses are always charged to the employer, with ING and NN Group each paying their share of the expenses separately. The expenses are published on the pension fund’s website. For more detailed information, please see the annual report. Members of the managing board or supervisory board who are employed by ING or NN Group already receive regular income. As a result, the pension funds do not pay them any remuneration.