Pensions provider Syntrus Achmea has cancelled its contract with the €300m pension fund TrueBlue, as the scheme’s demands were “too complex and expensive”.
Responding to questions from IPE sister publication Pensioen Pro, Hans Keukelaar, TrueBlue’s chairman, said the pension fund was surprised by Syntrus’s decision, because it considered its arrangements as “quite standard”.
The pension fund for the ICT sector offers average salary arrangements with an annual accrual of 1.875% for a salary up to €63,000.
Additionally, employers can offer an average salary plan, a collective defined contribution scheme or individual DC arrangements.
As of this year, True Blue also wanted to offer employers a choice over the levels of DC contributions – varying contribution rates depending on the member’s age.
“In the opinion of Synstrus Achmea, the combined arrangements were too complicated,” said Keukelaar.
“Flexibility for employers, however, is the reason for our existence,” he added.
The ICT scheme is to join provider AZL - part of NN Group – as of 1 January 2017.
TrueBlue’s chairman made clear that the quality of the pensions provision was not the reason for True Blue leaving Syntrus Achmea.
“We would have preferred to stay with the provider,” he stressed.
The provider, for its part, said that it wanted to terminate the contract, because of the complexity as well as the scale of the pension fund, which has almost 7,200 participants and pensioners in total.
The combination of both the complexity and small scale of the scheme would drive up costs of provision too far, Syntrus Achmea said.
Previously, Syntrus Achmea said it was pursuing standardisation of the pension arrangements offered by its pension fund clients.
The chairman of TrueBlue said that AZL would implement its pension arrangements, including the desired flexibility in setting age-specific DC contribution rates, against lower costs.
He added that asset management for the defined benefit and defined contribution plans would remain with NN Investment Partners and Achmea Investment Management, respectively.
TrueBlue has been actively seeking additional employers and wants to increase the current number of 3,400 active participants to 5,000 within three years.
Last year, the Dutch company scheme of copier manufacturer Ricoh joined the fund, bringing with it 1,600 participants and pensioners as well as 12 small firms with 75 participants in total.
Growth, however, has been slower than planned.
In TrueBlue’s annual report, its supervisory board (RvT) advised the pension fund to prepare for a ‘plan B’, such as a merger or joining a general pension fund (APF).
Keukelaar confirmed that the scheme is assessing these options indeed, but emphasised that its growth target should be feasible.
In his opinion, the pension fund is viable, in part because its annual premium income of €20m relative to the limited number of 360 pensioners.