Insurance firm Achmea has agreed with ABN Amro to buy its Premium Pension Institution (PPI) for an undisclosed sum. The vehicle will be renamed Centraal Beheer PPI later this year.
It first became possible to establish a PPI once the Premium Pension Institution Introduction Bill was passed by the Dutch Senate and signed into law on 1 January 2011. A PPI is set up to administrate individual defined contribution (DC) pension schemes and is part of the second pillar pension system.
“With this step we are strengthening our position in the fast-growing DC market. We are delighted we can now start servicing the employers markets via a PPI too,” Achmea chief executive officer Bianca Tetteroo said in a press release.
Achmea already runs its own general pension fund Centraal Beheer APF, and in buying a PPI it is joining its competitors NN Group and Aegon who already run both an APF and a PPI.
The 30 staff of ABN Amro’s PPI will receive an offer to join Achmea upon the closing of the deal, of which no financial details were disclosed other than ABN Amro making “a modest accounting profit”.
ABN Amro PPI has been executing DC arrangements since 2012. It currently has 995 clients, around 190,000 participants and its assets under management total €3.5bn. In 2020, it made a profit of €1.5m.
ABN Amro PPI is the third largest in the Netherlands after NN’s BeFrank and Aegon’s Aegon Cappital, which manage around €13bn between them. Asked about growth targets for Centraal Beheer PPI, a spokesperson said the vehicle “wants to grow in the top-3 by offering distinguished products to customers as well as advisers.”
Achmea said it has strong expectations “from the additional opportunities provided by the pension accord”, noting the strong emphasis on individual pension accumulation in the new pension system.
ABN Amro wanted to sell its PPI because it is “not a core activity” for the bank, a spokesperson told IPE.
“We expect our PPI to be able to better develop itself under the leadership of Achmea,” said ABN Amro CEO Robert Swaak.
The fact that ABN Amro PPI had to find a new administrator before the end of this year also played a role in the transaction, according to the spokesperson. The PPI’s current administrator InAdmin RiskCo, which is part-owned by Achmea, announced last year it was quitting the market for pension administration.