ATM, the new DNB supervisory approach for pension funds
Starting in 2021, DNB will have a new data-driven and automated approach to effective and structured supervision of pension funds: ATM (Actualization Supervision Methodology). It is an approach to make supervision more dynamic, allowing a faster response to developments.
How does the DNB supervisory approach work ?
Pension funds are assigned to an impact class. Each impact class has its own intensity of supervision. Proportionality is an important principle in the performance of supervisory tasks and therefore also in the classification of impact classes. Complexity also plays an important role.
To set priorities, risks are determined based on information gathering. By working with automatic scores and enforcing substantiation when deviating from these automatic scores, supervision is consistent and mutual comparisons are possible.
In a basic program (BP) applicable to all pension funds, an assessment of the risk profile (risk level and control) is obtained. This is the starting point for any deepening into a risk-based program (RP).
Below is a schematic representation of the basic program, which will apply to all pension funds. In the approach, from 5 risk areas, control of 17 risks is assessed.
What does this mean for you?
Because supervision is becoming more data-driven, medium-sized and small funds will also have to have their accountability reports on their financial and organizational 'in control' in order, so that when DNB requests information, transparent and clear insight can be provided into requested data and management of risks. For a number of pension funds, this means that the quality of (risk) management reports must improve. For a number of pension funds, this means that the quality of (risk) management reports needs to be improved, including better insight into the management of strategic and non-financial risks, including IT.
More information can be obtained from the DNB brochure: ATM, the renewed supervisory approach.
For questions about this supervisory approach, or other questions about pension funds, please contact our pension expert Hans Sieraad at hans@arcpeople.nl or 06 513 892 61.
