Dutch pension asset manager PGGM is to shed up to 25% of the workforce of its administrative unit by 2026. The planned staff reduction is the result of the departure of two clients and the replacement of manual tasks by robots, which is meant to cut costs.
PGGM said it is preparing for “a more dynamic” market for pension administration after the introduction of the new pension system from 2026.
This is because pension arrangements under the new defined contribution (DC)-based framework will start looking increasingly similar, the firm noted.
“PGGM is preparing for this new environment by being a highly competitive player: with regards to quality, but certainly also on pricing,” it said.
“As a result, we see a reduction of the number of jobs [in our administrative unit] by 20-25%. This includes the downscaling that results from the departure of Rabo PGGM PPI and SPH (the pension fund for general practitioners),” PGGM added.
In February, the firm announced the sale of its individual DC pensions vehicle, a joint venture with Rabobank, to Allianz.
SPH will leave PGGM as of 1 January 2022. PGGM’s chief institutional business Jeroen de Munnik said: “We deeply regret the departure of SPH as the GPs, being healthcare workers, play an important part in our strategy. Therefore we would have liked to continue servicing them.”
SPH will join Achmea from 1 January 2022. The fund told trade publication Pensioen Pro last year that Achmea’s experience with DC arrangements was the main driver for the switch. SPH is also a fiduciary management client of Achmea.
Forced lay-offs
PGGM does net yet know how many of the firm’s 1,500 jobs will exactly be made redundant, but it said forced lay-offs will be “unfortunately unavoidable”. The firm has a reserve fund worth €5.3m to finance redundancy packages.
The reduction in the workforce follows a significant expansion in 2020, especially in asset management.
“Our asset management unit has seen a growth of its workforce because our allocation to private assets has been growing. This is a labour-intensive investment category that is not scalable,” a spokesperson for PGGM told IPE.
The lay-offs will be focused exclusively in its administrative unit, he added.
Robots
The firm will double its efforts towards “digitalisation and robotisation” in the next couple of years, it said in its annual report. It is currently using 70 robots to perform both simple and more complex administrative tasks.
“We have been using robots for a number of years, and continue to expand their use,” the spokesperson said.
It is not clear to what extent the increasing robotisation can be linked directly to the upcoming lay-offs. “There is no one-on-one link, as we do not yet know how many jobs will need to disappear in the end,” the spokesperson added.
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