Dutch IT firm and pensions administrator RiskCo is to take over Inadmin, APG’s subsidiary for the administration of defined contribution (DC) schemes.
The transaction would be the second large take-over by the Utrecht-based company, which acquired Aon Hewitt’s defined benefit administration in October.
Following the addition of Inadmin – scheduled for May – RiskCo will serve 250,000 participants, up from 75,000 at the moment.
Cees Krijgsman, chief executive of RiskCo, said his company would generate 80% of its turnover from administration, as it would acquire Inadmin’s administration for DC, investment and insurance, including “attractive portals for participants”.
“We are to offer a complete range for pensions administration and we are ready to fulfill our goal of 1m participants with five years,” he added.
APG set up Inadmin in 2013 as its DC subsidiary, following the introduction of the Netherlands’ low cost vehicle for DC provision, known as PPI.
Inadmin’s client portfolio includes the PPIs of ABN Amro and Willis Towers Watson (LifeSight) as well as the DC pensions of insurer ASR.
APG, the provider for the €409bn civil service scheme ABP, said it was selling Inadmin for “strategic reasons”, and wanted to focus on serving industry-wide pension funds.
“Thanks to Inadmin, the APG organisation has gained experience with DC pensions,” said a spokesman.
However, Inadmin was also making a loss: €2.6m in 2015, according to the latest publicly available figures. However, APG argued that this didn’t play a role in its decision to offload the subsidiary.
Krijgsman said that RiskCo could improve the results of the company – to be renamed RiskCo-Inadmin - quickly.
“All pensions providers are struggling with IT, but it is our core business, and we have been developing administration systems for years,” he said.
He added that RiskCo could fully integrate technical and organisational aspects and improve efficiency as a result.
APG and RiskCo – which is 50% owned by large British administration firm PraxisIFM – declined to provide details about the price of the takeover.
Krijgsman said his company would replace a number of system components in order to achieve a faster and cheaper adjustment of pension plans and addition of new products.
He added that RiskCo would welcome new clients, including ones from abroad: “Through PraxisIFM and Inadmin we have leads to large players who want to offer DC arrangements in Europe through an IORP.”