NETHERLANDS – Flexsecurity, the €258m pension fund for temporary employment agency Randstad Holding, has outsourced its entire asset management to Kempen Capital Management (KCM).
The merchant bank will now manage Flexsecurity's 'basic pension plan' in addition to the scheme's 'plus pension plan', which Kempen has looked after since 2010.
In recent years, Flexsecurity has offered its 350,000 participants a largely age-dependent pension formula of a collective life-cycle plan with a matching investment mix per age group.
The pension fund is in the process of converting into the new low-cost pensions vehicle PPI to retain control of administration, communication, insurance and investments.
Ronald Ganzeboom, deputy director at Flexsecurity, said: "The investment portfolio of both pension plans is to be integrally managed for improved efficiency and lower asset management costs."
He added that the basic scheme – bar the application of long-duration interest instruments – would invest in the same asset classes as the 'plus plan'.
Ganzeboom said the collective life-cycle approach had been improved, and that the interest risk from the purchase of lifelong pension benefits at the retirement date would be mitigated through the investment mix.
"Through the fiduciary management concept, the pension fund can stay in control of its investments and also spread its investments over several managers," he said, adding that KCM would also advise the scheme on asset allocation.
Jan Bertus Molenkamp, director of fiduciary management at KCM, said he expected more players considering a collective defined contribution plan with a life-cycle approach, "as they often feel pressured by a nominal framework within DB plans, resulting in increased short-term focus for nominal security".
"With the new arrangements," he said, "we can address both the long term for younger participants and the short term for older colleagues who are nearing the purchase of a pension.
"As a consequence, the opportunities for higher returns and an inflation-proof pension are increased."
Last December, Flexsecurity placed its risk insurance with Nationale Nederlanden and outsourced its administration to provider AZL, both subsidiaries of banc-assurer ING.