No, in principle, pension funds are not permitted to apply weighted voting. The Pension Fund Governance (Further Measures) Act (Wet versterking bestuur pensioenfondsen) aims to strengthen governance. The Act attaches substantial weight to balancing the interests of representatives of employers, employees and beneficiaries (stakeholder representatives) in the composition of equal representation-based bodies. Weighted voting power could compromise this balanced consideration of interests and have a negative impact on board dynamics, the available time and suitability of the board members. However, in exceptional cases, weighted voting may be justified. In those cases the weighted voting powers must reflect the statutory composition of equal representation.
The Pension Fund Governance (Further Measures) Act stipulates a statutory distribution of seats in the case of equal representation boards. See Sections 100 and 102 of the Pensions Act (Pensioenwet) for more information.
The objective of equal representation on the board is to prevent one of the stakeholder groups (representatives of employers, employees and pension beneficiaries) from having decisive voting power in decision-making. The Act prescribes a fixed composition with a fixed distribution of the stakeholder groups within the board. Weighted voting could compromise the balanced consideration of interests of the stakeholder groups in the pension fund, e.g. if the stakeholders feel they are not represented equally in case of a distribution of seats that is not in accordance with the stipulations of the Act. If a board member's vote represents more than one seat, this could also raise questions about this member's available time and suitability. In other words: how can one board member represent the knowledge and expertise of multiple board members at the same time, and be able to devote sufficient time to the tasks and duties? Weighted voting could also have a negative impact on board dynamics, because influence in the board not only depends on voting rights, but also on quantitative proportions. The application of weighted voting could therefore compromise the strengthening of governance intended in the Pension Fund Governance (Further Measures) Act However, in exceptional cases, weighted voting may be justified. In those cases the weighted voting powers must reflect the statutory composition of equal representation.