APG Groep N.V. and ABN AMRO Bank N.V. set up the joint venture, to which APG contributes its expertise in pension administration and ABN AMRO its expertise in managing investments, in the middle of last year. The aim of both parties is to become a major player in the market for defined contribution pension schemes. APG manages over 30% of all group pensions in the Netherlands and has pension assets totaling approximately EUR 275 billion (November 2011). ABN AMRO has been active in the sector for a number of years through ABN AMRO Pension Services, which focuses exclusively on company pension funds.
The joint venture will focus on the second pillar of the pension system for employers with over 500 employees. Pensional’s board will consist of Carel Hooghiemstra (CEO and previously ABN AMRO’s Director of Pensions) and Floris Schilthuis (COO and previously APG’s Head of Strategy).
Pensional will be entering a growth market. The defined contribution schemes market is expected to grow substantially in the coming years. The wish on the part of employers for employees to bear part of the investment risk is an irreversible trend. Pensional will therefore provide mainly Lifecycle investment products specially developed for the PPI in accordance with the duty of care.
A PPI is a pension vehicle that, in accordance with European legislation, has been allowed to operate in the Dutch pension market since the beginning of 2011. Pursuant to this legislation, the management of defined contribution schemes is no longer reserved exclusively to insurers and pension funds.
A distinguishing characteristic of a PPI is that although it may operate pension schemes, it may not insure risks like, for example, outliving one’s pension assets and death. A PPI is therefore suitable for defined contribution schemes, under which the pension contribution is fixed but the final pension benefit is not. In other words, a PPI manages the assets but does not bear the risk, since the risk is borne by the pension beneficiary. Pensional will, however, facilitate the covering of insurance risks by means of a number of linked insurers.
Amsterdam, January 31, 2012
Pensional
APG - ABN AMRO Pensioeninstelling N.V.
For more information
APG ABN AMRO Pensioen Instelling
Floris Schilthuis
Telephone: +31 20 604 91 53
E-mail: floris.schilthuis@apg.nl
