Dutch supervisor De Nederlandsche Bank (DNB) has fined asset manager GSFS €5m for illegally using its pension fund as an investment vehicle.The regulator also issued the pension fund a €10,000 penalty, while fining the scheme’s three trustees €25,000 each and the sponsor’s chief executive €50,000.According to DNB, the GSFS Pensionfund had carried out large-scale dividend arbitrage activities, which it said largely benefited the employer.In the opinion of DNB, this policy was inappropriate for a pension fund, as pension funds are exempt from paying dividend tax, the FD said. Although the basic fine for similar violations is €500,000, DNB said the punishment reflected the benefits the asset manager enjoyed from its dealing.The pension scheme, for its turn, disagreed with DNB’s intention to remove its legal status as a pension fund, taking the supervisor to court. The pension fund lost its case, also after lodging an appeal following a negative verdict by a lower court.Financial news daily Het Financieele Dagblad (FD) quoted Jasper Hagers, the pension fund’s legal adviser, as saying that the scheme’s board was “baffled” by the fines.“DNB already knew the facts in 2012 and the activities have ceased since then. It feels as if the pension fund has received a kick when it is down,” he said.Hagers added that GSFS would fight DNB’s decision.Commenting on the case, Frank Vogel, board member at the asset manager, described the fines as “coming much too late in the day”.The FD reported that DNB and the pension fund have met each other regularly in court about the sponsor’s unorthodox investment policy over the past five years. The pension fund managed €354m of assets for its 20 members, according to the paper.This article has been updated to correct the spelling of Jasper Hagers’ name.