Dutch IT firm Centric is shutting down its pension administration business, less than five years after it entered the market. Its three remaining clients will be transferred to competitor Appel.
Centric announced on Wednesday it is throwing in the towel because it no longer sees opportunities for growth in the Dutch pension market, which is going through a process of consolidation.
The firm’s three remaining clients were Beton, the sector fund for the cement industry, and the two company schemes Thales and Yara. The three funds have 40,000 members between them. The price Appel paid for Centric’s client book was not made public.
Centric was the first IT firm to enter the Dutch pension market in 2017. Its start was promising as it managed to acquire a raft of clients including the sector funds Meubel, Tandtechniek, Houthandel, Reiswerk and Waterbouw.
However, controversies around Centric’s owner Gerard Sanderink as well as poor service led to a quick change in fortunes for the firm. Most of the new clients had left the firm by 2021.
This left the remaining clients with a problem: Centric was now too small to ensure continuity, especially in view of the transition to a defined contribution (DC) system which required significant investments in new IT systems.
Beton had given Centric until mid-2022 to provide it with a perspective for the future.
This perspective has now been found with Appel, which started operations in 2015 and runs the same administration system as Centric – AxyLife. The addition of the three Centric funds brings Appel’s member base to some 140,000, still leaving it with a negligible market share.