IT woes force Syntrus Achmea to drop industry-wide pension funds
Dutch pensions administrator Syntrus Achmea Pensioenbeheer has said it will stop providing services to industry-wide pension funds, as its new IT system has struggled to cope with their disparate arrangements.
The company said it had been forced to take drastic decision after it became clear the new system could not accommodate the schemes’ various pension plans and numerous “exceptions”.
A Syntrus spokesman said the company concluded it could not resolve the issue within a reasonable time period.
As a result of its decision, Syntrus is to make “hundreds” of workers redundant.
At present, industry-wide pension funds (23) account for about two-thirds of Syntrus’s business.
Five of them have left to find new providers, while two others have decided to liquidate next year; Syntrus said it would aim to transfer the remaining 15 schemes before 2019.
The pensions administrator is introducing an IT system to increase accuracy and cut costs by at least 20%, with a view to stemming losses at its pensions management business since its inception in 2009.
Early last summer, when Syntrus first announced the new system, it warned that it would need to “harmonise” pension plans.
Tom van der Spek, director of old-age provision at Syntrus, told IPE sister publication Pensioen Pro that the company would need to invest millions to keep the old system running for its sector scheme clients.
“Given their decreasing numbers, the investment would not be justified,” he said.
Van der Spek said Syntrus would instead focus on corporate and occupational pension funds, as well on the general pension fund (APF) of insurer Centraal Beheer, which is part of Achmea Group.
The company’s spokesman added that Achmea’s strategy would also target asset management growth.
The provider services about 70 pension funds, including the 23 sector schemes.
The ramifications of Syntrus’s decision for the company’s staff of about 700 remain unclear.
The union FNV warned that it expected at least 500 jobs to “disappear” over the next two years; Syntrus has said the figure would be “a few hundreds”.