If the Dutch parliament were to decide that pension funds have to ask their members for permission on whether to convert existing pensions from defined benefit (DB) to a defined contribution (DC) system, this would not be problematic for Pensioenfonds Architectenbureaus, the €4.4bn Dutch pension fund for architects.
“Listening to our members is all important to us, so we would use the event of a referendum for this,” said the fund’s president Robert Meulenbroek.
Agnes Joseph – a former actuary turned politican, elected to parliament on behalf of the new political party New Social Contract (NSC) in November – wants to introduce a binding member referendum on the pension fund level on the question whether DB accruals must be converted to DC capitals.
Joseph will be one of the speakers at a plenary debate on the future of the new Pension Act, which was voted through by the previous parliament more than a year ago, on Wednesday in the Dutch parliament.
During this debate, she is expected to propose an amendment to the current pension law to allow for binding referendums on DC conversion to take place. Joseph and the NSC support the introduction of the new DC system, unlike the election’s winner PVV, which wants to scrap the law entirely, but is opposed to the mandatory conversion of DB accruals without giving members a say on it.
While Dutch pension minister Carola Schouten warned late last year that a referendum would risk severe delays for the pension transition and could lead to an increase in costs, Meulenbroek appeared unconcerned.
“I’m not worried about a referendum. We will make the transition to DC only in 2027, so we will have time to wait and see how such a referendum plays out for other funds,” he said.
As the new DC system is supposed to empower participants, Meulenbroek believes a referendum would fit this purpose. “We listen to the wishes of our members, so if we were to categorically say ‘no’ to a referendum, that would be strange,” he noted.
This is not to say, though, that the fund is an outright supporter of a referendum, added Meulenbroek’s colleague Jacqueline van Leeuwen. “We have a neutral position when it comes to a referendum: we want to leave politics to the politicians. But if it happens, we will do our very best to explain the new system, which we want to do anyway,” she said.
Architects demand sustainable investments
A recent ESG survey showed a whopping 70% of members of Pensioenfonds Architectenbureaus would accept lower returns if assets were invested sustainably. “Some 22% of respondents even believe we must invest sustainably, regardless of the effect this has on pension benefits,” said Jacqueline van Leeuwen, a trustee at the pension fund.
Last year, the pension fund moved its asset management from PGGM, which it was asked to leave, to several discretionary mandates at Amundi, State Street, Fidelity and UBS AM.
This has had a positive effect on the fund’s ESG policy, said Van Leeuwen. “At PGGM, we were invested in pooled funds so we had little direct influence on the ESG policies of these funds. We now invest in mandates that are tailored to our ESG priorities, even at lower costs than before.”
In its investments, the fund focuses on two Sustainable Development Goals (SDGs): Sustainable Cities and Communities (SDG 11) and Good Health & Well-Being (SDG 3). Interestingly, members indicated they did not find the former SDG particularly important.
“This surprised us, because designing cities is the bread and butter of architects. In conversations we had in focus groups, it turned out that they had not selected Sustainable Cities and Communities, because they assumed the fund would take this into account naturally. When it comes to good health, they often established a relationship between affordable and well-isolated houses and the health of their inhabitants,” Van Leeuwen added.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra