It will cost Dutch pension asset manager APG about €250-300m to help its eight pension fund clients make the transition from the current defined benefit (DB) system to defined contribution (DC), according to chief executive officer Annette Mosman.
This is considerably more than the €100m prediction made by Mosman’s predecessor Gerard van Olphen in December 2020.
At the time, it was still completely unclear what the new pension system would look like and when it would be implemented, Mosman said in an interview with IPE’s sister publication Pensioen Pro.
Mosman now believes costs for the pension transition will amount to “one year of administration costs”. In 2022, these costs totalled €277m. Much of the expected expenditure is related to the modernisation of IT systems.
“These are large investments, that are partly needed anyway,” she said.
The modernisation of admin systems should lead to lower annual costs on the longer term, according to Mosman. But part of the investments will also go to improving communication with participants and helping to make the right choices upon their retirement.
“These are also costs that will have a return, albeit not a financial one, in the form of better informed members,” said Mosman.