Dutch pension administrator APG will cut costs by €240-270m until 2030 and cut 1,000-1,200 jobs in the process.
“APG will become leaner,” according to the firm’s chief executive officer, Annette Mosman.
APG has seen its costs spiral over the past few years, partly because of additional outlays related to the Dutch pension transition. In an effort to increase its grip on the pension administrator, civil service scheme ABP – which owns a 92% stake in APG – decided earlier this year that APG should become the exclusive asset manager for ABP.
Currently, the firm also serves other pension fund clients, which have been told to find a new asset manager. APG will continue to serve other pension funds for administration services. It currently has seven clients in addition to ABP.
At the same time, when APG and ABP announced their strategic change at the start of this year, they also said their high pension administration costs needed to be reduced.
APG’s staff costs have risen from €424m in 2021 to €602m in 2024, because of salary increases and extra hires related to the pension transition. As a consequence, the firm has seen a €107m profit in 2021 turn into small operational losses in 2023 and 2024, making a cost-cutting exercise inevitable.
Disappearing teams
APG has now devised a strategy to cut costs across the board. Administration costs have to come down by €240m to €270m by 2030, which “will impact employees across all business units and offices”, APG said in a press release.
APG has offices in Amsterdam, Heerlen, New York, Hong Kong and Singapore. The latter office may disappear, according to Mosman.
“Teams will change – some will relocate, others will split or disappear. APG will become leaner. That’s not an easy message. But to maintain our meaningful role and remain a leading player in the sector, we need to take these steps,” the CEO added.
Based on current insights, the number of structural positions will be reduced by 1,000 to 1,200 full-time employees, phased down to around 2,500 by 2030, said Mosman.
Currently, the firm has 3,700 full-time employees, up from 3,253 in 2021. Part of the reduction will be absorbed through natural attrition. Where necessary, APG will fully support employees in finding new opportunities.
As a result of the cost-cutting, APG expects asset management and administration costs to come down by about 20-25% on a structural basis, partly because its new defined contribution-based administration system will be cheaper to run.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication
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