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Netherlands roundup: Nestlé scheme to replace administrator

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Alliance, the Dutch pension fund of Nestlé and Nespresso, is to replace RiskCo with Achmea Pension Services as its administration provider.

The €609m scheme said the switch followed a market survey that showed Achmea as the best performer for risk management and digital communication.

The change was triggered by RiskCo’s acquisition of Aon Hewitt’s administration arm in October last year.

According Alliance’s annual report for 2017, RiskCo said at the time that it would continue using Aon Hewitt’s administration system Lifetime for up to a year-and-a-half, before switching to a new and flexible system geared to the expected changes in the Dutch pensions system.

Alliance’s risk management committee warned of risks emerging from the changes at RiskCo, and urged the board to assess other providers. The board said it was sensible to regularly check whether outsourcing partners still met the scheme’s requirements.

Pensioenfonds Alliance is the provider of the pension plans for Nestlé Netherlands, Nespresso Netherlands and Galderma Benelux, a wholesaler of pharmaceutical products.

The scheme, which has 5,400 participants and pensioners, reported administration costs of €310 per member last year. At September-end, Alliance’s funding ratio stood at 113%.

Nestlé's corporate headquarters in Vevey, Switzerland

Nestlé’s corporate headquarters in Vevey, Switzerland

Think tank details difficulties in longevity forecasts

Predicting individual life expectancy remains difficult despite the availability of a wealth of data, researchers of Amsterdam’s UMC hospital have concluded.

In a report published by Dutch pensions think tank Netspar, the researchers said that three quarters of the variations between individuals’ life expectancy could not be explained based on currently available data.

A relative small amount of the variations could be attributed to existing illnesses and physical limitations.

This meant that forecasting the costs of individual pension benefits was almost impossible, the UMC researchers said.

Instead of individual data, the researchers suggested that pension funds and insurers should focus on larger groups to obtain a better understanding of future liabilities.

Through the assessment of groups, any errors in predictions could be cancelled out, they argued. They based their research on data from more than 3,000 over-50s from the areas of Amsterdam, Zwolle and Oss during the period 1993-2017.

The researchers – Dorly Deeg, Jan Kardaun, Maaike van der Noordt, Emiel Hoogendijk and Natasja van Schoor – focused in particular on the extent to which known indicators could forecast life expectancy.

They looked at social-demographic aspects, illnesses and the use of medication, physical ability, lifestyle, psycho-social factors, and blood analysis, as well as many variables for each indicator.

Statistical analysis showed that social demographics, illnesses, physical ability, lifestyle and psycho-social factors could explain more than 21% of the variance in differences in life expectancy.

Blood analysis, which could provide clues about inherited conditions and cholesterol levels, added just 3.7% to the predictability of life expectancy, the researchers found.

The Amsterdam UMC staff said they expected that their conclusions would contribute to the debate about insuring longevity risk.

“Based on these factors, individuals could be classified in groups with a higher or lower life expectancy,” they said.

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  • Nestlé's corporate headquarters in Vevey, Switzerland

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