NETHERLANDS - SBZ, the €2.2bn pension fund for Dutch care insurer employees, is in exclusive talks with Syntrus Achmea to contract out its benefits administration as well as its trustee support office.
Pensions director Robert Meulenbroek stated in April, when the pension fund first started its search, that "a number of market developments" have prompted the fund's decision to outsource these activities. SBZ said its 24-strong staff will be employed by the appointed new provider and has insisted present service levels be maintained, as part of the conditions for any outsourcing agreement.
"Regarding these two key conditions, Syntrus Achmea seems the best candidate," said Meulenbroek.
The decision to outsource all management and administration activities was made in large part because of concerns over continuity and the vulnerability of the in-house management department, according to Meulenbroek.
"Key positions at the moment are barely filled, while increasing rules and regulations make those key people more important than ever. There is an increased need for experienced, knowledgeable staff which makes it hard for a small management organisation like ours to find the right people in the market," he said.
SBZ therefore decided several years ago to look for outsourcing solutions. "As a first step, the scheme has outsourced its asset management, with Fortis Investments - now part of PNB Paribas - responsible for risk management and Russell Investment Group responsible for manager selection," continued Meulenbroek. The arrangement was much talked about in the Dutch market two years ago as the first ‘dual fiduciary mandate'.
"This arrangement has been in effect since July 2007. Now we are effecting the next step, which is to outsource benefit administration and trustee support services," explained the director.
The contracting-out process is being guided by consultancy firm PricewaterhouseCoopers. If the exclusive talks with Syntrus are successful, the scheme's 24-strong in-house administrative staff will be transferred to Syntrus Achmea. There will be no changes to the asset management arrangement, however, said Meulenbroek.
"In the talks regarding takeover of our management office, we have made it clear from the start that asset management is not part of the deal. We are very happy with the arrangement with BNP Paribas and Russell and have no wish to change this set-up," he added.
If all goes according to plan, the transition of SBZ's management to Syntrus will begin in 2010, although Meulenbroek said the transition may not be completed until 2012, to ensure that there will be no adverse effects on the quality of service.
The pension fund itself will continue to operate independently and there will be no changes to the pension schemes it administers.
The industry-wide fund covers five average salary schemes used by 58 sponsoring employers, and delivers pension benefits to 17,000 active participants, 20,000 deferred members and 5,500 pensioners. The scheme had a cover ratio of 118% at 23 September 2009.
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