The new Dutch version of a IORP is the premium pension institution (premiepensioeninstelling, ”PPI”). This pension scheme vehicle is designed in particular to host cross-border DC schemes. The legislation introducing and regulating the PPI entered into force on 1 January 2011. 2011 was a turbulent year on the Dutch pensions market. Not only because of the introduction of a new pension vehicle, the PPI, but also because of several developments regarding pension funds. Various large pension funds have been hit hard by the financial crises, causing dramatic decreases of cover ratio’s and in some cases potentially leading to cut-backs of pension rights. This increased the attention of the public and the Dutch Parliament in respect of pension funds’ investment policies and their policy makers (mainly management and supervisory boards). Additionally, employers’ and employees’ representatives negotiated a new collective pension agreement (pensioenakkoord), including an increase of the pensionable age to 67 by 2025 and a movement towards so called ”soft pension rights”, implying a move to DC-like schemes. Looking at pension developments on a global scale, multinational companies are increasingly investigating the possibilities of establishing (group) pension vehicles that can operate pension schemes on a cross-border basis (”pension pooling”). This movement is caused by several factors, including the effects of the financial crisis. The expectations of pension pooling always have been high, but until recently hardly actually emerged. Now however, with the IORP II Directive in the pipeline, the consequences of the financial crises and the introduction of the PPI in the Netherlands, a new impetus is created for pension pooling. The PPI is, in that respect, an ideal vehicle for facilitating cross-border pension pooling: it was created for that purpose. The PPI was introduced as a new pension provider in addition to the two types of pension providers already existing in the Netherlands; insurance companies and pension funds. Although pension funds also qualify as IORPs, several legal and practical obstacles prevent them from operating cross-border. The PPI however was specifically designed to operate DC schemes coming from any country. It can only operate labor related (”second pillar”) DC schemes, on an individual or collective basis. This DC-orientation distinguishes the PPI from pension funds, as Dutch pension funds are mostly DB-oriented. The PPI is not allowed to cover insurance risks and is therefore obliged to transfer the accrued pensions immediately when the relevant participant reaches the pensionable age. In general, the PPI is considered to be a transparent and efficient pension provider. The PPI can be made as flexible as the establishing parties want it to be, since it can (but is not obliged to) outsource most of its activities. The PPI can thus select the most favourable asset managers, administrators, insurance companies and custodians, throughout the EU. The permitted activities of a PPI include activities that are normally carried out by pension providers during the pension accrual phase. The PPI ”collects” premiums and invests these until the pensionable age of the relevant participant is reached. At that date, the accrued capital must be transferred to an insurance company, which will carry out the pension payments. Furthermore, the PPI has a competitive tax regime: an exemption from corporate income tax is applicable and, due to its qualification as a resident for tax purposes, a PPI will be able to claim the advantages of the (internationally competitive) Dutch tax treaty network for income and capital gains on cross-border investments. Owing to these factors, a PPI can be considered perfectly suitable for the operation of DC-pension schemes and the servicing of the international pension market. In spite of the turmoil on the Dutch pensions market in 2011, the PPI has caught the eye of practically all major financial institutions, including not only pension asset managers, but also banks, custodians and insurance companies. Many of these parties are in the process of establishing a PPI and some have already filed for a PPI license with the Dutch Central Bank (De Nederlandsche Bank, ”DNB”). Several PPIs have been set up so far, all focusing on the Dutch market. Obtaining a PPI license however, is not an easy process. The PPI is not only a new vehicle for market parties, but also for DNB. There are various examples indicating that DNB has a strict approach when it comes to interpreting and applying the requirements when assessing PPI license requests. The issues that are in general under discussion between parties and DNB include the following. Governance DNB prefers the PPI to be operated as independently as possible. This means that a healthy balance must be created between the influence the establishing parties wish to have on the PPI on the one hand, and the independence of the PPI of those parties on the other hand. Relevant aspects in this respect include: (i) the legal form of the PPI; (ii) the (independence of) members of the management and (if applicable) supervisory board of the PPI; and (iii) the relation between the PPI and the establishing parties regarding, for example, fees and outsourcing. Investments The ”prudent person rule”, originating from the European IORP Directive, is applicable to the investment of the pension premiums received by the PPI. Whilst parties are trying to push their ”investment boundaries”, DNB is taking up a conservative approach, applying the rules strictly. With regard to investments, independence is a relevant issue in relation to the available funds in which the premiums are invested: are these allowed to be restricted to funds offered by one of the establishing parties? This is also one of DNB’s focus points when assessing PPI license applications. Permitted activities When applying for a license, the PPI can also request to be allowed to act as an intermediary between insurance companies and employers under the PPI license. If allowed by DNB, the PPI can function as a ”one stop shop” for employers, who do not have to search for an insurance company themselves in respect of arranging additional (risk based) insurances or the value transfers at the pensionable age of the employees. This however means that an additional set of rules becomes applicable to the PPI, which might cause an additional burden not all PPI’s can or want to deal with. Solvency DNB has recently indicated that it prefers the PPI’s capital requirements to be raised from the current €225,000 minimum capital, to 1% of the cumulative premiums with a minimum of €1 million. Furthermore, DNB wants a collective pension depositary (pensioenbewaarder) to be made mandatory. No legislative proposals have been announced or published in this respect yet, and it is not sure whether the DNB proposal will be followed up by the government as several market parties have objected against these additional and (in the opinion of many parties) superfluous requirements. There are however some examples showing that, during license application processes, DNB tries to impose requirements exceeding the current minimum capital requirement or the establishment of a pension custodian on the requesting parties, whilst this is not mandatory under current PPI legislation.