Coordinated campaign rolls out redesigned and strengthened
ABP needs no introduction and it is no surprise that it has won yet another IPE Award, the Silver Award for Best Public Pension Fund 2004, thanks to its quick thinking and innovative pensions repackaging to ensure the survival of its defined benefit plan alongside the introduction of new products. With some €150bn under management, the Dutch fund remains Europe’s largest and its participant base of 6,000 employers, 1.2m members and almost 700,000 pensioners is immense.
The redesigned package essentially concerns a policy of cohesion to protect its existing DB plan and enable it to prepare for the future in light of the downturn in the markets in recent years. ABP says it was weakened during these periods and thus got together with its social partners to draft and implement any necessary changes as well as completely modernise certain sector plans.
ABP says discussions began early in 2003 and, by November the same year, the decision to go ahead and revise its schemes was taken and the outline of the new structure determined. Given the size of the modifications being discussed and the numbers of parties involved, ABP says it is a remarkable achievement they were concluded in just six months.
Central to the redesign is a cohesive premium and indexation policy meaning the defined benefit scheme will continue. ABP says this is dependent on a balanced, but essentially explicit, distribution of risks and benefits covering the employers, employees, pensioners and deferred members, with levying the contribution level covering costs being the starting point. The contribution level can be supplemented if the fund comes under pressure, whilst indexation will be reduced and vice versa. This is the stepped policy, ABP says, and fits in with the introduction of the new mid-salary career plan, which is a new pensions contract that focuses on establishing a “contemporary, competitive and fairer” system of building a pension.
ABP has been working on the revisions for the past year and a half and finally began implementing them gradually between January and June this year.
ABP says this was a smooth and very accomplished process. Key to the restructuring and organisation are events that might affect a member’s life circumstances, such as working life, career changes, divorce, gaining a partner, death or actual retirement. ABP says its new package ensures any modifications to an individual’s personal plan can be made quickly and efficiently. ABP now also enjoys a permanent online link with employers’ payroll departments that means it can inform employees personally of their positions.
ABP has shown it can respond quickly when change is needed and as such its communications policy concerning the new package meant it needed just one coordinated and efficient campaign to inform participants in the five months between November 2003 and March 2004. The means with which it put the message out were diverse but designed to reinforce each other, ABP says. The campaign sought to inform of the consequences and benefits the new package entailed for individuals. This was published in the fund’s magazine with support and information also online and available at dedicated call centres.
ABP says getting the message out quickly was made all the more necessary by the fact that for the first time in its history, it had limited indexation for pensioners and the accumulation of member assets. The previous “blind faith”, as ABP puts it, in unconditional indexation had to make way for the new principle of aspiring to full indexation.
ABP says it then initiated a second, follow-up campaign between March and June this year to inform and offer another new product, PartnerPlusPensions (PPP), offering half the pension to relatives of pensioners aged 65 and over. ABP again used all the means of communication at its disposal in an efficient and coordinated manner. The information distributed included the details of the personal contribution level involved. Moreover, participants make use of a specific PPP calculations module on the internet and they will be able to review their PPP applications in ABP’s 2005 pensions overview. ABP says the success of this campaign, using a unique combination of processes, systems and means of communication, saw 86% of the target group the fund contacted report they felt the campaign had heightened their understanding on the PPP issue.