The €2.2bn pension fund of Dutch supervisor De Nederlandsche Bank (DNB) said it is assessing whether to continue independently or to join a general pension fund (APF).
The probe comes in the wake of pensions provider TKP Pensioen’s announcement that it would cease its services no later than 1 January 2023, as it would prefer to focus on larger clients.
According to the DNB’s pension board, with a new administrator, the fund would be sufficiently robust to continue as a company scheme for now.
However, were the scheme to opt for a consolidation vehicle, it would need to do so in collaboration with the employer, as both prefer to keep existing pension rights and future pension accrual under one roof, it emphasised.
In its annual report for 2019, DNB said it will reach a decision on its future next year.
Earlier this year, DNB Pensioenfonds took another step to distance itself from its sponsor by replacing almost all its trustees and advisors linked to the supervisor, arguing that it wanted to avoid the semblance of conflicting interests.
At the same time, it reduced the number of trustees from nine to six, but stuck to the board model of equal representation.
It also established its own administrative bureau for board support, as a consequence of increased outsourced services and its decision to no longer use the employer’s expertise.
Additionally, following the abolishment of the scheme’s advisory committees, the responsible trustees have been tasked with preparing for board meetings in co-operation with the new pensions bureau.
Returns
The pension fund said its 62.6% matching portfolio returned 10.4%, while its return holdings of worldwide equity (26%) and property through REITs (11.4%) generated a combined return of 8.5%.
Based on the scheme’s funding level of 119.8% at year-end, it decided to grant an inflation compensation of 87% of the consumer index. In March, its coverage ratio had dropped to 117.9%.
Last year, the DNB Pensioenfonds switched management of its equity portfolio from BlackRock to Rotterdam-based Robeco, in particular tasked with implementing the first stage of the scheme’s ESG policy.
The pension fund also appointed consultancy Sprenkels & Verschuren as its new actuarial adviser to replace TKP Pensioen.
It reported administration costs of €340 per participant, and spent 18 and 4 bps on asset management and transactions, respectively.
The DNB Pensioenfonds has 2,045 active participants, 1,885 deferred members and 1,475 pensioners.
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