Pension funds are founded for one sole purpose – to make sure workers get a decent pension when they retire. So it came as a bit of a surprise when two of Europe’s biggest pension funds, ABP and PGGM, announced they were setting up a support fund for the elderly survivors of the Asian tsunami disaster.
“We want to set up a Unicef-style fund aimed at helping elderly victims of the tsunami and other disasters,” says Alfred Kool, PGGM spokesman and project leader of the new fund. “We are calling on pension funds all over the world to join us in our effort.”
PGGM is currently approaching all of Holland’s 800 pension funds, as well as funds in Sweden, Japan, the US, the Middle East and the UK. Kool thinks the support fund could raise as much as e25m, and could be operational in the summer.
According to the latest estimates, more than 175,000 people have lost their lives in the biggest disaster ever seen in our lifetime. Why did PGGM and ABP, who between them manage assets of well over e200bn, decide to help?
“The idea comes from Jenneke van Pijpen, who sits on the PGGM board on behalf of the Abvakabo FNV Union,” says Kool. “Jenneke was at home watching a news item about an elderly man in India who had lost everything when she came up with the idea of a support fund for the elderly survivors.
“In countries like the ones hit by the tsunami in Asia, children play a crucial role for people in old age. With so many children dying in the tsunami, there are thousands of elderly people out there who have nothing to fall back on. This is an exceptional situation. Therefore, we want to set up a fund to help those elderly people in need.”
PGGM’s plan immediately got a positive response from ABP, Europe’s biggest pension fund. PGGM and ABP donated e500,000 each to get the support fund started.
Both funds made the announcement on the day the Dutch people raised an unprecedented e112m via a telethon held on various television and radio channels. In a joint statement, ABP and PGGM said that the initiative “fits in with the core activity of both pension funds as well as with our philosophy, which is based on solidarity and collectivity”.
Although the idea of a support fund for elderly survivors of the tsunami was well received, it also raised some eyebrows. Should pension funds really be doing this sort of thing? Their main goal is, after all, making sure participants get a decent pension when they retire.
“We realise we cannot just pull a certain amount of money away from our assets and start spending it elsewhere. That would get us into trouble with the pensions regulator straight away,” explains Kool. “Instead, we have come up with the following. We are asking all of our pension participants and sleepers to donate one euro each. One euro is just a small, largely symbolic gesture. But because of our scale – we have a total of 1.9m pension participants and sleepers – we can raise a sum of e1.9m, which is substantial.”
PGGM will inform its participants of the support fund in a letter,
giving people the chance to opt out of the donation. “We are not being paternalistic, and telling our
participants what to do. People who are against the idea of a pension fund setting up a support fund for elderly victims of disasters are given the opportunity to stop their payment.”
Why did ABP and PGGM not step in during previous natural disasters? “The tsunami disaster happened on such a scale that an exception had to be made. Second, it is important to stress that the support fund is meant to be sustainable in the long run. In other words, we want it to grow into a fund that can be used by elderly people in need all over the world.”
Kool says he can eventually see the support fund turning into a “Unicef-style fund” for elderly survivors of future natural disasters. under the umbrella of a global relief organisation like the United Nations.
He believes the support fund would fill a void in future relief efforts. “We did some research, but it turns out hardly any of the relief effort is actually focused on looking after elderly survivors of a natural disaster. Most of the aid is focused on giving emergency aid and helping rebuild the area. This is of course what should happen, but I think it will be good to have a fund that looks after elderly survivors after most of the immediate relief work has been done.”
What about the practical side of the story? Who will qualify for aid, and who will not? Where do you draw the line? How do you reach people in need? And, equally important, how do you make sure the money does not end up in the wrong hands? “The participation of relief organisations with good local knowledge is crucial, and we will take their guidance when we have to make decisions like that,” says Kool. “We are, after all, a pension fund, and not an aid organisation.”
Although the UN has not been approached yet, PGGM is talking to a number of relief organisations in the Netherlands, as well as the Secretary of Development Aid, who is said to be “very enthusiastic” about the plan. “They have the local knowledge, and can tell us exactly what is going on and what is needed. People’s old-age benefits vary from one country to the other. So, the sort of aid we will be giving will also vary. It could be done in the form of a pension-style regular payment to someone in need, or to help build homes for the elderly.”
Although e25m in assets does not sound like a lot, certainly compared with the billions PGGM and ABP manage, Kool is convinced this sort of money can go a long way. He points to Sri Lanka, where PGGM is currently helping in the reconstruction effort. “This is completely separate from the support fund, and will be funded from e50,000 raised by our employees. We are building homes there for e2,000 each, so a support fund with e25m in assets will go a long way.”
Kool says the asset management of the fund will probably be done by the pension funds themselves. “Nothing has been decided about that, but we have informed the pensions regulator about our plans because we know pension funds are not supposed to do that.”
Finally, Kool is calling on all pension funds worldwide to make a contribution. “This is not a fund-raising effort, but an attempt to set up a sustainable support fund for elderly people in need, now and in the future.”

Your help needed
Do you want to help the Support Fund for Elderly Survivors of Natural Disasters/Steunfonds Oudedagsvoorziening ZO-Azie?
Please contact:
Alfred Kool at PGGM in the Netherlands
Phone: +31 (0) 30 277 9955