NETHERLANDS - The €120bn pensions provider PGGM and Rabobank have jointly applied for a licence to operate the new Dutch PPI pensions vehicle.

Under the name Rabo Company Pension ('Rabo BedrijvenPensioen'), both companies intend to offer  defined contribution schemes for small and medium-sized firms not using existing pension funds, the companies said in a joint statement.

PGGM and Rabobank said they wanted to combine their strength and expertise as part of their strategic co-operation, launched last year.

A PPI can only offer a DC pension plan for the accrual phase. The resulting benefits are to be purchased from an insurer.

Both companies expect that their PPI can start servicing their business clients through local branches of Rabobank.

Whereas Rabobank will take care of advising customers, PGGM will carry out the pensions administration as well as investment policy and advice, said David Uitdenbogaard, spokesman for PGGM.

He added that asset management would be dealt with by Rabobank subsidiary Robeco, while insurer Interpolis would provide member benefits.

Robeco is already operating a PPI, but its pensions vehicle is targeting larger companies.

Martin van Rijn, chief executive of PGGM said: "PGGM can combine its pensions expertise and innovative power with the advisory power and the dense branch network of Rabobank, in order to offer a proper and affordable pension for workers who can't or don't want to participate in a pension fund."

In an interview in the financial daily Het Financieele Dagblad, Van Rijn was quoted as saying that the new PPI must be self-sustaining, but was not expected to make a profit for the time being.

"It is mainly meant as a learning [curve]. A next target group can be self-employed without staff in the care sector," he said.

"We are used to providing defined benefit schemes, and therefore we want to get to know the market first," Uitdenbogaard added.

Piet van Schijndel, board member of Rabobank, stressed the its strong market position, complementary competences and the co-operative background of both parties.

PGGM is the asset manager and pensions provider for the €100bn healthcare scheme PFZW as well as five other pension funds, with approximately 2.5m members in total.

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