The €700m Dutch pension fund of Royal Bank of Scotland is the first Dutch company scheme to make use of the new general pension fund (APF) vehicle and hopes to grant participants full indexation of pension benefits as a result.
It will join the APF run by insurer Centraal Beheer, a member of Achmea Group, from next year, according to Jacco Heemskerk, executive member of the RBS scheme.
Heemskerk said Centraal Beheer had been awarded the contract because it seemed to be keener to get the mandate than Stap, the APF jointly operated by Aegon and its subsidiary TKP, which had also been short-listed.
According to Heemskerk, an additional benefit of the Centraal Beheer APF is that his pension fund had already outsourced its administration to Syntrus Achmea.
“As a consequence, our arrangements were already pretty much standard and only required minor technical adjustments to fit into Achmea’s new administration system.”
In the Centraal Beheer APF, the RBS scheme will have the option to transfer its pension rights after five years, explained Heemskerk. He added that other APFs had dropped out because they could not offer a single compartment dedicated to the pension fund.
A spokesman for Aegon said the company regretted missing out on the contract but declined to comment further.
The RBS scheme sought consolidation as the employer is withdrawing from the Netherlands and will cease its active involvement with its pension fund. The scheme has about 300 active participants but this number is expected to drop to a handful at the end of next year.
“This will leave the pension fund without workers to fill board positions,” Heemskerk noted.
He added that the RBS scheme, because of its funding of 125%, expected to grant its participants a full indexation by joining the APF.
“Had we joined an insurer, inflation compensation would hardly have been possible.”
Heemskerk made clear that joining the APF would significantly reduce administration costs and would also decrease the “already low” asset management costs.’