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Consolidation’s cornerstone

We journalists are naturally drawn to stories involving big sums of money, controversies, disagreements, and ambitious innovations. Pension fund consolidation in its various forms has all these elements, which is why the asset pooling projects among the UK’s local government pension schemes are so fascinating.

The Netherlands has been consolidating for years and shows little sign of stopping. Other forms of collaboration such as cross-border pension arrangements have also provided much to interest an industry nerd such as myself.

I was therefore keen to attend a seminar last month hosted by UK consultancy Hymans Robertson in London. Albert Smolenaers, a partner at Dutch advisory firm Sprenkels & Verschuren was there to present on lessons from his country’s experiences – excitement abounded. So I could not help but be disappointed when he revealed the key to success to be boring old administration.

On reflection, however, the less sexy side of institutional investment is absolutely the most important – as Smolenaers described it, “one of the most critical changes a pension fund can make”. 

As Olaf Boschman writes in our Netherlands report, antiquated systems and complex arrangements can mean even the smallest updates take months to implement.

Pension records go back decades – I recall from a summer job as an administrative assistant many years ago the cardboard boxes full of handwritten letters from pensioners, semi-legible records of addresses and dates, and even microfiches. It is not cheap to manage, maintain and store this data, either physically or digitally. 

Consolidators, take note: Your fancy new investment service with billions under management will mean nothing to its ultimate beneficiaries if your administrator does not know where they live or when they are supposed to retire.

Nick Reeve, News Editor
nick.reeve@ipe.com

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