Dutch pension service provider APG may outsource its pension administration in the run-up to the switch to a new defined contribution (DC)-based pensions system in the Netherlands, APG’s head of IT Wim Henk Steenpoorte said in an interview on its website.
“We could adjust our existing systems, but because the new contract is so fundamentally different to what we have now, I’m not sure this is the best option,” said Steenpoorte, who is responsible for the implementation of the new pension contract at APG and has earlier likened the switch to a DC-based system to “open heart surgery”.
Because of the complexity involved in the switch to the new contract, the pension service provider is considering outsourcing its administration to an external provider or building the required software through an alliance with others, he added.
An APG spokesperson told IPE the company expects to make a decision in the second quarter of next year.
The fact APG is once again considering to team up with others is remarkable. Last summer APG shelved plans to set up a shared service centre with its peers PGGM and MN, citing the looming introduction of the new pensions contract as the reason.
According to the spokesperson, a possible new alliance could take “several forms”, including a joint venture with an “external party”.
Steenpoorte’s statements come just days after UK-based fintech Smart Pension announced it would start offering its pension administration platform in the Netherlands as well.
Its director Dan McLaughlin told Pensioen Pro at the time that Smart is not aiming to compete with the large domestic pension providers such as APG or PGGM by launching in the Netherlands. “Instead we want to cooperate with them. We offer our technology and platform to these parties,” he said.
Steenpoorte also said in the interview a scenario in which existing pension rights in defined benefit pension arrangements are not converted to DC would be “a nightmare – for pension funds, their members and also for APG”.
He said: “In such a scenario, all members will have two separate pension contracts, one for the old system and one for the new one. This means all changes would have to be processed in both systems. If members have questions about their pension, we would also have to look at both systems to find the answer.”