The Heerlen based NLG330bn (E150bn) Dutch superfund ABP has said it may seek to introduce a defined contribution (DC) element to its pension scheme in response to calls for greater internal plan flexibility and the possibility that schemes under the ABP umbrella could go it alone next year.
Jaap Maassen, managing director of ABP Pensions and a member of the board, says schemes within ABP are seeking more autonomy and greater freedom in the arrangements they offer.
“We are hearing whispers in some of the sectors within ABP about the introduction of top-up DC arrangements. If legislation permits us then we may begin to offer – with the agreement of our social partners – DC as individual top up plans.”
However, he notes that Dutch legislation would dictate that at the moment of retirement the top up savings would have to be transferred to some kind of pension provision on a final salary basis. “This is the closest I think we will get to DC for the whole sector,” Maassen adds.
And next year’s privatisation of the Dutch social security system is set pose a slight headache to ABP, according to Jean Frijns, chief investment officer and board member. “This could impact on the service we provide but will not affect the asset base in any way. “ Things will become more complicated and there will certainly be more involvement of auditors etc. in our business. I don’t particularly see how the clients will benefit.”
Jaap Maassen says ABP has also set up a special division called PRO to analyse what is happening within its different sectors of ABP and offer regulatory and fund management expertise. “Some of our clients now know how they want to organise themselves, particularly in terms of their actuarial systems and are seeking to become more company and sector specific within the ABP structure,” he notes
He believes one factor ABP has in favour of retaining its funds is the systems to get the flexibility being sought.
“We certainly need to be able to accommodate more flexible pension arrangements for individual client groups and we are offering different investment programmes to schemes with varied investment strategies.
“We also have to ensure we remain competitive though in terms of the services we are offering.” Hugh Wheelan