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€1.3bn engineering scheme outsources fixed income to BMO

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Waterbouw, the €1.3bn Dutch sector scheme for hydraulic engineering, has outsourced management of its €600m fixed income portfolio to BMO Global Asset Management.

The scheme said BMO would also be tasked with monitoring and reporting on its entire investment portfolio.

The decision comes in the wake of the scheme’s decision in 2017 to continue independently.

According to Kitty Roozemond, Waterbouw’s independent chair, a survey of the robustness and cost efficiency of pension provision had made it clear that the in-house management of fixed income holdings had to be contracted out.

This also applied to monitoring and reporting. The latter task had been carried out in part by the pension fund and in part by consultancy Sprenkels & Verschuren.

Marsha van Beusekom, board member of Waterbouw tasked with investments, said that the scheme had recently outsourced its pensions administration to IT firm Centric and that it expected cost savings as a result.

Waterbouw previously carried out administration in-house. In 2017, it reported costs per participant of €220.

Van Beusekom said that the pension fund had already outsourced management of its 40% equity holdings to Vanguard.

The scheme’s 10% stake in property was invested in real estate funds and monitored by engineering firm Sweco.

Van Beusekom added that Waterbouw would continue to carry out board support itself, and had hired two extra staff for the job.

The industry-wide pension fund has approximately 2,740 active participants, 3,300 deferred members and 5,720 pensioners, affiliated with 74 employers.

At November-end, its funding stood at 117%.

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