Aon Hewitt is to outsource administration for its 17 Dutch company pension fund clients to IT company RiskCo.

The consultancy said that the in-house developed systems and software of Utrecht-based RiskCo would be able to run the administration of the schemes’ 75,000 participants better, cheaper and faster than Aon’s current system, Lifetime.

The new administration system would also be more accurate and flexible, it added.

Pascal Hogenboom, chief executive of Aon Hewitt in the Netherlands, explained that pension funds were facing ever larger challenges “as participants demand an insight into their current pension rights, and supervisors require better communication with participants”.

“And while freedom of choice for pension arrangements is expected to increase, legal requirements for data protection are being tightened,” he added.

Hogenboom emphasised that the consultancy would keep on offering the pension funds investment consulting, actuarial services and board support.

He said that Aon had found RiskCo’s approach to be “truly innovative”, and that his firm and RiskCo would share their market knowledge and expertise.

Aon’s 35-strong administration team is to be transferred to RiskCo, but will initially keep on working from Aon’s offices in Eindhoven and Amsterdam.

RiskCo specialises in data and calculations for the pensions and life insurance sector.

Cees Krijgsman, chief executive of RiskCo, said that the firm’s in-house system used source data, such as salary and changes including divorce and value transfer, which don’t require continuous adjustments. “It generates less errors and is more flexible,” he said.

He added that costs would drop over time, and that his company could offer more services for the same fee.

Krijgsman said the system could be extended with a participant portal to provide real-time insight into individual pension rights as well as communication services.

The CEO estimated that the transition process to the new system would take between 12 and 18 months.

RiskCo would be ready to take on new clients as of 2019, Krijgsman said, and intended to be among the largest five players in the Dutch market for pensions administration in five years’ time. RiskCo already implements the pensions administration of approximately four Dutch company schemes with defined benefit arrangements in Belgium.

The ambitious expansion is to be facilitated through a recent investment by administration company PraxisIFM, which has taken a 50% stake in RiskCo.

According to Krijgsman, PraxisIFM – a Jersey-based firm operating in 10 countries – is also interested in RiskCo’s system.

Earlier this year, Aon’s Hogenboom said that his firm was seeking a partnership with an IT company for its pension administration operations, and that Aon wanted to refocus on fiduciary management and investment advice as part of a strategic re-orientation.

Outside of the Netherlands Aon is also stepping back from pensions administration. It is withdrawing the service for a number of UK clients, and sold its US administration business earlier this year.