PME, the €55bn pension fund for workers in the Dutch metals and electronics industries, is swapping MN for Aegon-owned TKP as its pensions administrator. The main reason for the switch is that TKP’s IT systems are more advanced, it said.
“TKP’s IT systems are more agile and better enable us to provide bespoke solutions to our members and realise our ambitions. In this respect TKP is indeed ahead of MN,” a PME spokesperson told IPE.
Some of the ‘high-tech’ employers whose employees build up their pensions through PME, such as chip machine maker ASML, have a preference for a more IT-savvy pension administrator, PME’s executive director Eric Uijen told daily Het Financieele Dagblad.
The change, which will come into effect on 1 January 2022, is a bold move as PME co-owns MN with two other pension funds: PMT and Koopvaardij.
The move to Aegon subsidiary TKP, which announced late last year that it would lose its largest pension administration client Detailhandel to Capgemini, has been in the works for a year and a half.
The timing is related to the upcoming pension reform in the country, the spokesperson confirmed. “We wanted to announce the switch to a new administrator now, so we have enough time to implement everything before we move to the new [defined contribution-based] contract.”
PME wants to make this move “as soon as possible”, but does not yet have a timeline for its implementation. The draft new pension law that will provide further details on the new pension contract is expected to be published next month.
Costs
PME had been critical of MN’s performance for a while, having originally flagged concerns last spring over its new admin system.
In its 2019 annual report, the scheme said it was worried about MN’s “ability to change and futureproof its organisation”.
Regulator De Nederlandsche Bank (DNB), for its part, criticised the administrator’s new IT system, saying it did not yet meet expectations.
PME also believed the costs for its pension administration were too high, especially compared to other large pensions funds. “A further cost reduction is therefore necessary and is an important topic of conversation with our administrator,” the scheme said in its annual report.
Whether annual costs for pension administration, which amounted to €116 per scheme member in 2019, will come down after the switch to TKP is not yet clear.
PME said the relatively high costs at MN were “not the main reason” for its move.
teh scheme will retain MN for its fiduciary management, however, which accounts for the bulk (85%) of its cost base.
“We see asset management as something completely separate and changing fiduciary managers has not been on the table,” the spokesperson said.
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