Dutch civil service scheme ABP will switch its governance model to a two-tier board as of next year. As a result, it is looking to appoint three new full-time executive directors with the aim to improve control over the pension fund’s asset manager APG.

The ABP board will be split into three full-time executive directors and 12 non-executive part-time directors, led by the fund’s president Corien Wortmann. Currently, the board consists of 12 part-time trustees who will become non-executive directors in the new governance model.

With the change, ABP follows in the footsteps of metal scheme PME which several years ago was the first Dutch sector scheme to switch to a two-tier board.

The €509bn pension fund’s supervisory board will be dissolved once the changes are effectuated. ABP’s two directors for its policy advisory office will be made redundant, but they can apply for the new full-time executive director jobs.

The three vacancies will be filled before the end of the year.

ABP expects the new structure with three full-time executive directors to speed up decision-making at the pension fund and improve control over asset manager APG, as one of the new executive directors will be solely in charge of the investment policy.

The second executive director will be responsible for pension policy and the transition to the new defined contribution (DC)-based pensions system, while the third will act as a general manager and president of the executive board.

ABP’s accountability body approved the changes, but a significant minority voted against them as they believed them to be insufficient to improve control over APG, since the majority of the board will remain part-timers with a strong affiliation with social partners.

“We are not convinced the changes solve the issues pertaining to the control over APG. This is disappointing since it was the main reason for the changes,” a member of the accountability body told financial daily Het Financieele Dagblad.

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