NETHERLANDS - The Dutch pensions regulator has granted APG and ABN AMRO Pension Institution a licence for operating a Premium Pension Institution (PPI).
The new joint venture, dubbed Pensional, will target companies with more than 500 workers for defined contribution (DC) arrangements, with APG handling pension administration and ABN AMRO managing investment.
The companies said they expected strong growth in the Dutch DC market, as the trend of employers shifting investment risk to employees looked “irreversible”.
They said Pensional would mainly offer life-cycle investment products - age-dependent investments with risks decreasing with age. However, they said participants could also make personal investments through a selection of external investment funds.
Pensional will assess at least once a year whether a given investment portfolio fits within a client’s investment profile, and participants who prefer not to invest will be able to buy an insured pension.
Because a PPI is prohibited from carrying such risks as longevity, Pensional has contracted out coverage of these to several insurers.
A spokesman at APG said the market had shown “considerable interest” in the new joint venture and that it hoped to “welcome new customers soon”.
Carel Hooghiemstra, former director of pensions at ABN AMRO, will manage the new company, while Floris Schildhuis, former head of strategy at APG, will serve as chief operations officer.
APG currently manages more than 30% of collective pensions in the Netherlands, mainly for the €246bn civil service scheme ABP, while ABN AMRO Pension Services solely targets company pension funds.