Delta Lloyd Group will adopt the proposed compensation scheme for clients facing high costs in defined contribution pension schemes arranged via their employers.
- Delta Lloyd adopts defined contribution scheme recommendations
Delta Lloyd Group will adopt the proposed compensation scheme for clients facing high costs in defined contribution pension schemes arranged via their employers. Following the recommendation, which was the result of intensive consultations with the employer and employee representatives in the Labour Foundation and the Financial Services Ombudsman, Delta Lloyd Group will make this compensation available as soon as possible rather than waiting until the policy maturity date.
Paul Medendorp, member of the executive board: "Delta Lloyd Group welcomes this recommendation and is confident that it will contribute to ending the discussion on high charges for insurances with an investment component. We consider this an important step after Delta Lloyd Group became the first insurer in 2008 to reach an agreement on compensation for customers with unit-linked policies. This is an important step to restore confidence."
Under the terms of the scheme announced yesterday evening, the costs payable (for advice, insurance and the capital built up) by employees participating in defined contribution schemes via their employers will not exceed 9.5% of contributions and an annual 1.5% of the value of their investments. The new agreements mean that if a scheme's costs exceed this level, the insured person will be compensated for the difference on the policy maturity date.
Wherever possible Delta Lloyd Group will settle any compensation due as soon as possible rather than waiting until the maturity date. This means amending existing contracts so that costs amount to a maximum of 9.5% of contributions and investment costs to no more than 1.5% of capital accrued. Our clients will receive information in 2011 at the latest on the consequences this compensation will have on their contracts and the value of their policies.
Delta Lloyd Group has a total of 4,000 insured schemes. Delta Lloyd Group expects to pay approximately €40 million on compensations in the next years. The MCEV effect (after tax) for Delta Lloyd Group will amount to approximately €30 million.
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Notes to editors:
About Delta Lloyd Group
Delta Lloyd Group is a financial services provider offering life insurance, general insurance, fund management and banking products and services. Delta Lloyd Group's target markets are the Netherlands and Belgium. In the Netherlands it mainly operates under the brand names of Delta Lloyd, OHRA and ABN AMRO Insurance, in Belgium under the Delta Lloyd brand.
Delta Lloyd Group's goal is to be recognised as the most reliable and highly regarded insurer and financial services provider in its targeted markets, offering customers security through risk assurance, income protection and wealth creation. In the medium term, Delta Lloyd Group aims to become one of the three largest insurance companies in the Dutch market and one of the five largest insurance companies in the Belgian market.
Delta Lloyd Group believes that the strategy will be successful in enhancing shareholder value and enabling Delta Lloyd Group to deliver long-term benefits to all of its stakeholders: customers, shareholders, distribution partners, employees, suppliers and the community at large.