MN Services, Robeco at odds over fund mergers
NETHERLANDS – Forced mergers between smaller pension funds are undesirable because they’ll become dependent on big banks, says MN Services.
The comments run counter to earlier remarks by Robeco chief executive George Moller.
Moller recently pleaded in favour of establishing large national ‘pension champions’, to allow the Dutch pensions industry a leading role within the European pensions market.
In his view, the social partners, who govern the pension funds, are dragging their feet.
MN’s chairman Ruud Hagendijk, in the daily Het Financieele Dagblad, said: “Our company is the living proof that Moller’s wrong.”
“MN Services has started as the privatised pension company of the industry-wide sector of the light engineering industry, but has become asset manager en pensions provider of other companies in the meantime.”
“This shows that the social partners are definitely willing to shed these tasks. They acknowledge that implementation costs will decrease, processes will work faster and the investment policy will become more professional.”
According to Hagendijk, legislation to enforce a split into a board of a pension scheme and a commercial provider is undesirable.
“Scaling-up and a further professionalizing will happen automatically. The complexity of the pensions sector has increased dramatically, since the introduction of the new financial assessment framework FTK and new accounting rules. Boards will be forced to contract out more and more,” he stressed.
In Hagendijk’s opinion, it will be risky if pension funds also sell their whole balance. “Sooner or later, they could loose their grip on their pensions policy. The fact that the social partners control the balance, shields them from the large international business banks,” he thinks.
The chairman of the €32bn provider proposes another route for expansion of the Dutch pensions industry. Because of the decrease of the variety of pension schemes, he spots opportunities for a basic and open scheme for companies, or industry-wide sectors. It could be the start of a pan-European pension fund, he said.
At the moment, MN Services is scouting the European market. Its provisional conclusion is that the UK market offers the best prospects, mainly for the contracting out of asset management, Hagendijk indicated.