NETHERLANDS – Dutch bank assurance group, SNS Reaal Groep, has invested €105m in a collective defined contribution pension scheme – the first Dutch financial institution to do so.
SNS Reaal has entered into a five-year contract with Stichting Pensioenfonds SNS Reaal Groep N.V. This will see a total of 21.5% of employee salaries going into the fund, which has now split from the company.
The fund will receive a fixed premium for five years. This will be sufficient to cover all costs, and the money will only benefit the participants.
Speaking from Utrecht, SNS Reaal spokesperson Ad Brits explained that new international financial reporting standards, coupled with employees’ desire for a fixed annual percentage rate, had forced this separation.
“Formally we were not fiscally or legally attached, but we were attached on an organisational and financial level,” said fund head, Mariëtte Simons. “Now we are completely independent and can outsource.”
The investment of €105m “was to give the scheme a really good start and to ensure that the employees are as safe as possible in the future,” said Brits. This financial safety net was one of the key reasons the scheme was accepted, according to the spokesperson.
“The change brings with it both risk and advantages,” Brits continued. “This way the pension fund can decide the way they invest, and the company is no longer part of that process. The pension fund is both well-financed and self-supporting.”
Simons and Brits believe that this may well start a trend in the Netherlands. Multinational manufacturing corporations Azko Nobel and DSM are among the Dutch companies that have already made such moves.
Simons hopes that the fund will soon receive good returns on investments and a good coverage ratio, “so that the pension will have real buying power.”
Following agreement talks with labour unions on May 31, SNS Reaal are currently in the process of finalising finance agreements.
Earlier this month IPE reported that SNS Asset Management plans to change the way it researches sustainable investing.