NETHERLANDS - Dutch health care pension fund PGGM is considering restructuring to take on insurance industry competitors, according to reports.
Forced by new financial pension regulations forbidding pension funds to sell insurance products, PGGM has decided to set up new management structure. This would see investment management and administration split off from the original pension fund.
The board of PGGM has decided to the latter, Dutch financial newspaper FD reported, to open up the possibility of selling new commercial products, such as insurance and life course, to its o own pension subscribers.
PGGM board chairman Hans Alders stated that the fund feels it as a necessity to be able to offer other financial products to its customers. Current pension regulations have been a major stumbling block to this.
PGGM and ABP, the largest Dutch pension fund, have been in a long-term conflict with the supervisor DNB over the matter.
The insurers have asked the supervisor to block the funds' commercial activities, which are seen as directly impacting the insurers' market position.
PGGM's subsidiary Careon has received an edict from the DNB that all commercial activities outside of pensions were prohibited.
Life-course products are only able to be sold by insurers or other independents. In a statement to the FD, Alders said that the new structure of PGGM however will give it more flexibility.
PGGM has openly stated that it expects to provide cheaper products than current insurance products in the market.
At the same time, Alders indicated that the fund is assessing the option of putting investment management and administrative under a new structure.
Alders expects a green light for that from the supervisor and the Ministry of Social Affairs.
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