NETHERLANDS - The €77bn healthcare and social workers' scheme PGGM, has officially announced the separation of its asset management and administration activities.
The move is aimed at offering a more integrated package of income products and advisory services, alongside the existing pension scheme, it said. This isn't possible within the present structure.
"The current legislation and regulations restrict pension funds like PGGM to providing pensions, while there is a need in the healthcare and social work sector for a wider-ranging package of income-replacement products and comprehensive advisory services," Hans Alders, chairman of the board of governors, explained.
"PGGM's employers' and employees' representatives are keen to meet these needs by switching to an organisational structure that provides a wider scope. However, our activities will continue to be based around a solid pension scheme. And our market will remain the healthcare and social work sector."
Currently, Zeiste-based PGGM is one of the last remaining self-administering schemes, that combines its policy-making and administrative activities.
"The plan is to split the present organisation into a body which remains responsible for the assets and the pension scheme, and another organisation for administration and asset management," spokeswoman Ellen Habermehl told IPE.
The representatives of employers and workers are considering setting up a separate cooperative entity for the administration, PGGM stated.
The necessary preparations for the change, e.g. defining the product range and establishing competences, will be carried out in 2007. The new set-up is supposed to take effect in 2008, Habermehl added.
As part of change, PGGM will also look at the position of its subsidiary Careon, she said. Careon has been established as provider of the new tax-friendly ‘levensloop', or life course, scheme.
According to the spokeswoman, the reorganisation won't lead to redundancies. "On the contrary, because we will increase the number of products, we will probably need more staff," he said.
In order to be allowed to take its owns decisions on the products and advisory services it wishes to provide within the new structure, PGGM's plan needs approval of the regulator, De Nederlandsche Bank, it indicated.
PGGM's board of governors has decided on the split, after positive advice from the PGGM Council and the Employees' Council, and following an intensive scenario analysis over the past 18 months, the scheme said.