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About APG



2.2 Who we are and what we do

For us, retirement is about people. We want to make a difference so that we, our parents, and our children have a good income for today, tomorrow, and in the future. 

Every day — from offices in Heerlen, Amsterdam, Hong Kong and New York, or satellite locations in Brussels, Shanghai, and Beijing — around 3,200 APG staff members dedicate themselves to the people at hand: 4.8 million people who accrue or receive their pension through one of the eight pension funds for which we work. People who work or have worked for the government or in education (ABP), in construction (bpfBOUW), at a housing corporation (SPW), in the cleaning sector (BPF Schoonmaak), in sheltered employment (PWRI), as medical specialists (SPMS), as architects (the Pensioenfonds voor de Architectenbureaus) and at APG itself (PPF APG).

We administer all aspects of the pension scheme for these funds. This starts with a proper pension administration and customer-oriented service. On behalf of the funds, for example, we collect the pension contributions and pay out the pensions. On behalf of the pension funds, we provide information and explanations to people who are accruing or have accrued a pension or who are already retired. For example, via our Customer Contact Center, and also online. 


For ABP, bpfBOUW, SPW and PPF APG, we manage the assets that have been built up with the pension contributions paid by employers and participants. These assets have grown thanks to the returns we generate from the investments we make on behalf of the funds. At the end of 2021, the total was €636 billion. That is an amount that carries with it a great responsibility. After all, how we handle these assets determines the pensions of millions of people, now and in the future. 

When we invest for the funds, we do not just focus on the return in euros. We want to work towards a society in which we sustainably share prosperity and well-being in the Netherlands and abroad.


To continue making a difference we need and want to do more. With 100 years of experience — first under the umbrella of ABP and since 2008 as an independent organization — APG understands what pension issues are really about. We use that knowledge and expertise to promote progress in terms of assets, people, and society. We do this by contributing to public debate. We want to help increase the understanding of pensions and ensure that the Netherlands gets more of a grip on pensions and becomes more financially fit.

As the largest pension administration organization (pension administrator) in the Netherlands, APG plays a major role in the transition to a new pension system that is expected to be fully operational in 2027. During this complicated process, we stand side by side with the funds and social partners; we are designing the future pension system as efficiently and clearly as possible.

APG works to achieve the highest possible pension value, considering that value in a broad sense, not only in financial terms. We also attach importance to issues like solidarity between generations, sustainability, and an inclusive society. After all, what use is a good pension if the world around you has become unlivable or if you cannot be a part of society?

2.3 Our core activities

Administrating pensions for our clients is one of our main tasks. In addition, we organize asset management activities for ABP, bpfBOUW, SPW and PPF APG.

2.3.1 Pension administration

For our pension administration activities, we have ICT systems that record the agreements with the participants and that are used to collect premiums and pay out the pensions. APG also provides the annual pension statements. Our client teams are multidisciplinary. This means that people with different backgrounds and knowledge, such as actuaries, lawyers and marketing experts, are on the same team. By doing this, we help the pension funds set the course. We pay close attention to the feasibility of the pensions: the simpler the contracts and the fewer exceptions, the less chance of errors and the more efficient the work will be. This is all in the interest of the pension participants. Because APG works on behalf of eight pension funds, we can keep costs manageable. Innovation and digitalization play an important role.

We start with the needs of participants and employers. On behalf of the funds, we inform and guide them. We aim for a “superior customer experience.” We see it as our responsibility to give participants an overview and insight into their pensions. This enables them to make better decisions about their income — today, tomorrow and in the future. Our Customer Contact Center, which receives some 50,000 questions a month, plays an important role in this.

In our work for the funds, we see the employers as an important partner, since they are close to the participants. With our services, we help employers to meet their (administrative) obligations and duties. We also support them in providing information to employees.

2.3.2 Asset management

APG manages the assets of four pension funds. We invest the pension contributions of the participants of ABP, bpfBOUW, SPW and PPF APG. Our objective is to maximize the pension value while investing in a sustainable and responsible manner. We aim for the highest possible return. In doing so, we take acceptable risks within the limits of our pension funds' policies. And we always think of costs. We have about 1,000 in-house investment specialists, spread across our Dutch and international offices. Moreover, we invest for the long term, with the obligations of our pension funds in mind. Over 25 years ago, we started measuring returns. Since then, the investment returns on the pension assets we manage have averaged about 7% per year. Put simply, more than 75% of the amount paid out as a pension comes from the return on investments.

APG not only wants to ensure that our pension funds can provide their participants with a good pension: we also want to contribute to a livable world, for current and future generations. In our experience, these two principles go hand in hand. Responsible investment certainly does not have to come at the expense of the return on our investments. We have committed ourselves to the development goals of the UN. When we invest, in every asset class, we weigh ESG criteria — i.e., criteria based on environment, social and governance  integrally. APG is one of the world's most sustainable asset managers, as is evident from the rankings of the Principles for Responsible Investments. We are constantly developing new instruments and partnerships in order to remain a leader in this field.

Fiduciary  Model
We manage assets based on a fiduciary model that we have developed with our pension fund clients. We break this down into three roles. Portfolio Management executes our investment mandates. Risk Management continuously monitors whether the investment process and the investments themselves remain within the agreed limits. And as an independent advisor, Fiduciary Management acts as a strategic advisor to our pension funds. 
Our clients provide investment mandates that are prepared in conjunction with the Fiduciary department of Asset Management. The Fiduciary department also evaluates how these mandates are implemented. In doing so, we assign about 30% of the investments to external specialists. The remainder is managed by our own investment teams.  

2.4 How we create value

We work with our clients to realize good pensions. In doing so, we aim for growth across the board: in assets, in people, and in society. Both prosperity and well-being are central.

APG is committed to creating maximum pension value for our pension funds, their participants, and society. We make a difference in several areas: 

  •  We do our work as efficiently as possible and keep administration costs as low as possible, thereby achieving the highest possible return for participants.
  • We invest pension monies collectively in a responsible manner and thus contribute to the affordability of the pension system and to making our society more sustainable.
  • We are a guide in the retirement world and help participants become more financially fit.
  • We create value for our employees by providing an inclusive work environment where we actively work toward equal opportunity and equal pay for equal work.
  • APG wants to be a financially healthy organization for its shareholders. Only then can we ensure continuous pension administration and realize our strategy. 

In the value creation model, we show how our service to the pension funds and the pension funds' member employers and their participants is central to the value we create.

Rutger Hoekstra, ‘broad-prosperity economist’

“The current economic growth goes hand in hand with sustainability problems, such as climate change and the loss of biodiversity. In addition, inequality has risen in many countries in recent decades. This does not mean that all sectors should grind to a halt, however. Businesses that are shaping a sustainable future can continue to grow rapidly; that's where pension funds get their returns. But the mantra of ‘growth is good’ does not apply to the entire economy.”



2.4.2 APG and the United Nations Sustainable Development Goals

Many companies in which we invest on behalf of our clients play an important role in achieving the UN development goals. In the Responsible Investment Report, we discuss in detail how we are making the investment portfolio more sustainable and explain on behalf of our clients how we are contributing to the 17 United Nations Sustainable Development Goals (SDGs).
Based on our business operations and the value we want to create, we have selected four of the 17 SDGs we want to help further. By contributing to these goals, APG is working toward a future in which we share prosperity and well-being in a sustainable way.

SDG 1: No poverty

We want to improve the financial fitness of more than one million pension participants by 2025.

SDG 10: Reduce inequalities

We want to lead by our own example in the area of diversity and inclusion. We have targets for the male-female ratio in various ranks of APG, and we also encourage our employees to be actively involved in society.

SDG 13: Climate action

We want to contribute to remaining on the 1.5-degree Paris path. By 2030, therefore, we want to have climate-neutral operations and the assets we manage will be in line with the Paris agreements. By 2050, the emissions from the investment portfolio we manage will be net zero.

SDG 17: Partnerships for the goals

In the area of responsible investment, we want to set global standards together with like-minded people. One example is the platform for asset managers (SDI AOP) that provides insight into the contribution of investments to the development goals of the UN. We aim to have the market adopt this standard, so that the share of sustainably managed assets grows significantly in the years ahead.

We are integrating these four goals into our processes and, in 2022, we will develop the right benchmark methods that will enable us to show what our social impact is. On aspects where this social impact also affects our services for the pension funds, we will align with our clients for coherence. In the section “How sustainable is our own business?” and in the appendices to this report, we explain how we are making our business operations more sustainable.

2.4.3 What do our stakeholders consider important?

We keep an eye on the expectations of our main stakeholders. That is why we place great value on the conversation we constantly have with them. The better we know what is important to them, the better we can do our work.

First and foremost, we work for our clients, the pension funds, and for the employers and participants affiliated with the pension funds. Other important stakeholders are our own employees, shareholders, parties in which we invest, strategic partners, and regulators. We are always exploring which other organizations or institutions could be a consultation partner. In the dialogue with our stakeholders, we share our knowledge. We also talk to them about our strategy, objectives, substantive issues, and our prospects. This is an ongoing process, and the discussions take place at all levels of the organization. The Executive Board is also involved in this process. In Chapter 8, Appendices, we give an overview of the stakeholders with whom we stay connected and in what way.

2.4.4 Materiality analysis

We examine what our stakeholders consider important and conduct an annual materiality analysis. In 2020, we presented around 20 material topics to our internal and external stakeholders. Seven of these topics turned out to be the most important to them: managed pension administration, responsible investment, highest net return, contributing to a future-proof pension system, transition to the new pension contract, confidence in pensions, and providing a grip on income for today, tomorrow, and beyond.

In 2021 we updated the materiality analysis. Our starting point was the developments and discussions that took place during the year and the subjects that came up in the dialogue with our stakeholders. We also looked at the subjects of news coverage involving APG. We interviewed a number of stakeholders. 

We have merged two material topics. “Contributing to a future pension system” and “Transition to a new pension contract” are now one theme: “The new pension system.” This allows us to better position the developments surrounding the new pension system and avoid any overlap. We have added the topic of Digital security and privacy to the most important material topics.

In Chapter 8, Appendices, we show in the connectivity table the connection between our material themes, value creation, strategy, objectives, KPIs, opportunities and risks.

2.5 Our ambitions and strategy

With the contours of the new pension system in sight, we are working on an agile, strong organization so that we can make this complex transition without any hiccups. 

2.5.1 Maximum pension value

Our mission is “Building your sustainable future together.” Our strategic goal is “Maximizing pension value.” We want to create — in the new system too — the best possible pension for the participants. We aim for the highest number of income years for later and we provide high-quality services at a competitive price.

2.5.2 Strategic pillars

Our house is built on three strategic pillars. 

Leading pension administrator

We offer our participants the highest number of income years and the quality of our products and services. We are a leading asset manager with a solid position in the international asset management market. We invest within our clients' risk profile and, factoring in their environmental, social and governance (ESG) policies, offer the highest possible net return. We are the leading pension administrator. This is the basis of everything APG does: the robust administration of our clients' pension scheme. We are participant-focused and ensure performance with above-average quality at a market-based price.

Strong pension funds

It is important for our funds to strengthen the bond with their participants. For now, and certainly also for the future, when participants may be given more freedom of choice. We want members to continue to choose their pension fund as a matter of course. On behalf of the funds, we provide (even) more participant-oriented services. We offer our members additional services and products, such as Clear Overview & Insight, the Personal Pension Pot, and the Pension Coach.

Trusted guide

Together with our funds, we help participants make conscious choices about their income for today, tomorrow, and beyond. This gives them a better grip on their own financial future. In the coming years we will experiment with suitable solutions and develop services in the field of coaching and guidance. 

2.5.3 Strategic building blocks


APG has set five clear goals for itself:  
  1. We are a leading and solid (long-term) investor on behalf of four pension funds; we aim for the highest possible return. We invest responsibly; we offer these clients a total solution by organizing the entire asset management process for them. Digitalization plays a prominent role; we use data analysis, workflow automation and smart analysis platforms on a large scale. 
    See also What our asset management has achieved.
  2. We are a leading pension administrator, offering high-quality services at a competitive price. We are creating an even more robust pension administration and we set the highest standards for data and ICT. Together with social partners, we are working on simplifying the schemes.
    See also What we have done as a leading pension administrator.
  3. We are adapting our organization and systems to be ready in time for the introduction of the new pension system. We are also guiding and advising the pension funds we work for during this process.
    Zie ook Preparing for the new pensions system.
  4. We empower the pension funds and strengthen their connection with the participants, and we offer additional (online) services and products on behalf of the funds. We are transforming into a participant-oriented organization. This means a change in working methods, behavior, and competencies. The customer (and his/her feedback) is central.
    See also also How we work together and How we have been of service to pension participants.
  5. We are a trusted guide in the pension world — for our clients, for participants, and also for society. Together with the funds, we help participants make conscious choices about their income for today, tomorrow, and beyond. In the coming years, we will experiment with suitable solutions and develop services such as coaching and guidance.
    See also How we have used our knowledge and expertise and How we have been of service to pension participants.

2.5.4 The foundation

To successfully implement our strategy, we need a solid foundation. We build on committed and knowledgeable employees and ICT that functions properly.

Our employees

We are committed to continuous employee development, including that of the leadership team. After all, we need people who can adapt to a constantly changing environment. This is particularly important in the transition phase to a new pension system. We create a safe environment with good employment practices, where everyone can be themselves and where we work together in a results-oriented and pleasant manner.


The demands on data and ICT are increasing — we will notice this even more with the transition to the new pension system. Optimal ICT allows us to implement changes faster, offer additional functionalities, and continuously develop digital services and products for participants and employers. It also helps us keep costs down.

2.5.5 Clear choices

The introduction of the new pension system, which is expected to be operational by 2027 at the latest, and societal developments are forcing us to place extra focus on several issues. We have set a number of priorities for 2022 and 2023: 

  •  We want to remove all the irregularities from our administration so that we are fully prepared for the transition to the new pension system;
  • While continuing to provide our usual services, we are working to build our new policy and capital administration, and to establish new links with other systems;
  • We will continue to make the investment portfolios, which we manage on behalf of the pension funds, more sustainable.

Setting priorities means making clear choices. Choices that are difficult, but necessary. In making these choices, the Strategy Execution Team advises the Executive Board. In terms of our knowledge and expertise, this means that the emphasis is on introducing the new pension system within APG. We do not want to compromise on the quality of our services at any time or in any way. We cannot do everything at once, so this means that some strategic initiatives will have a lower priority and we will have to carry out our total task in phases. In doing so, we are in consultation with our pension fund clients about the sequence and feasibility and we are also taking their ambitions into account.

APG cannot simply go it alone. We are dependent on political decisions regarding the new pension system and on the pension scheme choices made therein by the social partners of the individual pension funds. This means that we also have to consider any changes or adjusted time schedules. After all, we want to be ready to directly implement the decision-making and the choices. 

2.5.6 Dilemmas related to a managed transition

The transition we are facing requires clear choices, and this also leads to dilemmas.

How do we achieve a managed transition in an uncertain playing field?

We have titled and themed this report “clear choices” for a reason. After all, how can we ensure a managed transition to the new system if there are still so many uncertainties about its final form? That is why making clear choices is so important for APG. The current transition has been likened to doing open-heart surgery. APG is a busy store that is undergoing thorough renovation. We have to be ready for the client of the future, without compromising the client of today. 

We do this by focusing on creating a stable base for 2022. Ensuring that we meet our most important commitments and that our operational organization is running smoothly. Because only by doing things correctly now, can we confidently implement the innovations properly. There is an outline of the new system, but it has not yet been worked out in its final form, so we are simultaneously fleshing out various possible scenarios. And that puts a lot of pressure on internal processes and capacity.

How do we prepare our employees for this transition?

A lot is demanded and not only from the internal organization and our systems; the transition also presents a challenge for our employees. New skills need to be developed, different knowledge is required, flexibility is crucial. Jobs will disappear or be determined differently, and other jobs will take their place. There is an urgent need to find new and scarce talent, which is necessary to enable the pension fund, the employer, and participants to be involved in the major changes that are about to take place. The pressure is therefore great, above all because the timetable is tight. 

How do we deal with these pressures on the organization?

Good governance is about making choices and that means that we, as pension administrator, must prioritize certain parts of our strategy. This phasing is necessary: after all, not everything can be delivered at once.

How does the price per participant evolve?

We aim for a market-based price for the services we provide to our pension fund clients. This is expressed in the price per participant. On top of the price for basic services, we have made agreements to compensate for strategic investments in participant orientation, “Grip on Data” and “Pension of the Future.” This has increased the average price per participant in 2021. 

In the coming years, we will have to invest even more to be ready in time for the transition to the new pension system. We expect the average price per participant to increase further in the years ahead. This transition offers the opportunity to modernize our ICT systems, reduce the complexity of pension administration, and make processes more efficient. Eventually, therefore, the price per participant for basic services may fall significantly. We will make separate arrangements for pension funds requiring additional services,

Tarik Uçar, executive director of Schoonmaak industry pension fund

“Incomes in the cleaning industry are low. People often have to stack part-time contracts to make ends meet. Because of these low incomes, pensions are also low. As a fund, we try to offer people a certain standard of living after retirement. Therefore, we try to keep the costs as low as possible. Every year, we discuss with APG whether the price for pension administration can be lowered further. I recently heard a cleaner say: ‘For 10 euros you can get a pair of pants from C&A.’ So those 10 euros make the difference between having new pants or not. Every extra euro of pension paid out is another euro.”

What does the postponement of strategic ambitions mean for our clients?

The choices we must make are not always synchronous with the wishes of the funds for whom we work. In addition, the priorities of the funds may differ among them. This makes it even more complex to ensure that all wishes are adequately addressed in the operational phases. This means that we must also conduct a dialogue with our fund clients about making clear choices — to put the consequences of those choices on the table honestly and openly. These discussions are not always easy. A good example is the ambition to further expand the client missions for funds and participants and, in that way, work on improving the Net Promoter Score (NPS) figures. This is also essential for APG but, given the primary importance of a managed transition to the new system, we have been forced to realize this ambition at a later stage.

It was a tough choice. But in the end, we believe that by making the choices we make, we are serving the best interests of the participants.

2.6 Our world of today and tomorrow

Much is happening in the world around us that has both direct and indirect consequences for pensions and APG’s work — such as COVID-19 and the run-up to the new pension system. 

2.6.1 COVID-19

At the beginning of the COVID-19 crisis, we could not have imagined that it would last for years. The pandemic has changed everyone's view of work — do we really need to be in the office to do the job well? To a greater or lesser extent, working from home will remain a regular part of the weekly pattern for large groups of people. Travel between offices, both domestically and internationally, has also changed. In Chapter 2, Our Results in 2021, we explain how we deal with this within APG.

2.6.2 Coverage ratio of pension funds

For the time being, the coverage ratio remains an important measurement tool for our pension funds. The coverage ratio shows the relationship between the available assets and the value of all current and future benefits. The coverage ratios of all the pension funds we work for have risen, so a reduction in pension benefits has been averted. The financial position of a number of funds does not yet permit indexation of pensions. We are, however, once again performing value transfers on behalf of all our clients; these are permitted if the coverage ratio is above 100%.

2.6.3 Geopolitical developments

When Russian troops gathered near the Ukrainian border at the end of 2021, this increased tensions. The war that broke out in February when Russia invaded Ukraine is, first and foremost, a disaster for the residents of the areas involved.

Currently, participants in Dutch pension funds primarily notice the higher inflation, which is a consequence of the quickly rising prices of oil and gas. The sanctions imposed on Russia and the response to them by Russian authorities are playing a key role in the financial markets. Due to existing sanctions and based on ESG considerations, APG only invests in Russia to a very limited extent. Over time, however, the consequences of higher inflation and limited growth may also be evident in other parts of the portfolio. ABP and bpfBOUW have decided to divest themselves of all investments in Russian companies. When market conditions allow this to be done in a responsible manner, we will execute the sales of these investments.

2.6.4 Economic trends

In many countries, including the Netherlands, the economy recovered extremely quickly after the first phase of the COVID-19 crisis. One reason for this is a generous fiscal and monetary policy. Confidence returned, particularly when there was a prospect of properly functioning vaccines, and vaccination programs gained momentum later. Stock markets reached record highs and the labor market overheated, as did the housing market. However, it is still too early to draw comprehensive conclusions for, say, the growth of the economy or the investment climate. Many sectors — such as SMEs and the cultural sector — have been hit hard by the lockdowns and other COVID-19 measures, and the course of the pandemic has been and remains erratic. Generous policies have caused debts to rise further. The consensus among policymakers is that this is preferable to the frugal policies in the years following the 2008 crisis and, for now, the market seems to be proving them right. However, concerns about debt levels may once again lead to turmoil going forward.

2.6.5 Rising inflation

What is certain is that, for the first time in years, attention has shifted back to inflation, which is remarkably high, both in the US and in Europe. In the Eurozone, annualized inflation had risen to 5% by the end of 2021, as Eurostat figures show. This is the highest figure since measurements began in 1997. In the Netherlands, average prices rose by 5.7% in one year, the highest inflation rate in 40 years. Eurostat attributes more than half of the inflation in the Eurozone to the higher price of energy, which showed a 26% increase in 2021. The crucial question is whether the price increases will pass by themselves or if they will last for a longer period. Prolonged inflation puts price stability at risk, and this will require central bankers to intervene. In the US, where wages are rising rapidly in addition to prices, this moment has already arrived. The European Central Bank (ECB) did announce in 2021 that it would be scaling back its buying policy but an increase in the policy interest rate is even further away for the ECB.

With the rise in inflation, investors are seeing the end of a period of ever-higher valuations. This could put pressure on returns in the coming period. Another point of attention is the reduction in support packages that governments and central banks deployed during the COVID-19 crisis. This generous support ensured a historically low number of company bankruptcies in 2021, despite the pandemic. Catching up in this area increases the risk for equity and credit investors. Real estate, such as offices and stores, could normally be a "safe haven," but that is not necessarily a certainty after the COVID-19 pandemic, with the increase in working from home and further growth in online shopping. The economic structure after COVID-19 is surrounded by a host of uncertainties.

As pension investors, we watch the rising inflation that is eroding the purchasing power of pensions with some concern. Investments in real assets, such as equities and commodities, allow the value of the portfolio to rise with the price level. Rising interest rates, which reduce valuations in financial markets, are good news for the coverage ratios of our pension fund clients. The value of the pension liabilities is usually more sensitive to this than the investments that fund them.

2.6.6 Climate

US President Biden has also reconnected with the rest of the world on climate goals. The US is again participating in the 2015 Paris Climate Agreement and was also a discussion partner at COP26, the climate conference held in Glasgow in November 2021. Here, the Paris ambitions were tightened up. Previously it had been stipulated that global warming must remain below 2 degrees, with a target of no more than 1.5 degrees; at the new summit, the 197 countries acknowledged that 1.5 degrees is actually necessary. New CO2 reduction plans must be made. The goal is to reduce emissions by 45% (compared to 2010) by 2030. 
There is also much criticism of the agreement because they are said to be too vague. For example, the final text contains a passage about phasing out the use of coal and the subsidy for fossil energy, but no dates are given. However, the Netherlands has committed itself, along with twenty other countries and organizations, to stop investments in foreign coal, oil, and gas projects within one year.

2.6.7 Responsible investment

Responsible investment remains high on the agenda, with ESG criteria as the starting point. We see this in concrete terms, for example, in investments in “fossil fuels.” ABP announced in October 2021 that it would stop investing in producers of fossil fuels. APG will gradually sell its shares in the oil, gas, and coal sectors on behalf of this pension fund client. 

With the climate in mind, we are also looking at certain real estate investments differently. Floods, fires, droughts, and other natural disasters caused by climate change cause enormous damage. One way or another, some of the costs end up being borne by the investor. This subsequently has an effect on the returns we generate for pension funds.

2.6.8 The new pension

One of the developments that directly affect APG is the introduction of the new pension system. We see the potential for great benefits in the system reform. The key word is simplicity. A new system offers an opportunity to start with a clean slate. And with that, an opportunity to have an explainable system that matches the perceptions of the participants.

Initially, the system was to be fully implemented on January 1, 2026, but delays in the legislative process have postponed this until January 1, 2027, at the latest. Although this gives the parties who will have to shape the new pension in practice — such as APG, the pension funds, and the social partners — more time for the transition, there will also be more uncertainty for the time being. 

Until all the details have been confirmed, we are working partly on the basis of hypotheses. We may have to make adjustments at a later stage. That does not have to be a problem but, if unexpected developments occur, it can lead to delays in the implementation. We are keeping a close eye on developments. Some of the funds we work for have already indicated that they wish to switch to the new system in 2025, so we have already started our preparations.

What remains?

We must avoid throwing out the baby with the bathwater; the good elements of the current pension system will be kept. The pension remains a lifelong benefit. Moreover, the State pensions (General Old Age Pensions Act, or AOW) remains the basis for the pension. In addition, the idea of solidarity is retained because we manage the risks via collective investments. After all, millions of people together can cope with risks better than a single individual can. Finally, the so-called compulsory membership remains in place, which means that employees in certain sectors must always be affiliated with a pension fund. 

What is changing?

The main difference between the current system and the new system is that we are moving from a benefit plan to a contribution plan. Participants will no longer accrue entitlements, as is done under the existing system, but they will build up personal pension assets. In the current system, pension benefits are fixed, in principle, with indexations done and reductions taken here and there. This makes pension funds insufficiently resistant to (unexpected) shocks. The new rules will change all that because the benefit payments can vary from year to year. This enables pension funds to absorb the adverse effects of any shocks and spread them over a longer period.

In the new system, it will become clearer how much money you put in as a participant and how much capital you build up. However, the pension will be more flexible under the new system. It will go up when the economy is better and go down when things are going badly. For younger employees, there is enough time to absorb setbacks. If you are due to retire, there is no such time. The new rules ensure that the mobility in that case is smaller. For people “halfway” through their accrual, the new rules can be disadvantageous. That is why these participants will receive compensation or have special arrangements applied to them.

Different rules also apply to the investment of pension contributions in the new system. In the current system, we invest for everyone with the same return and risk, even though the risks differ for each age group. In the new plan, there is more customization per age group, based on the risk that participants within the particular age group are willing to accept.

The pension funds and social partners do have some choice in the new system. One can opt for what is called a Solidary Contribution Scheme in which the aim is to maintain sufficient solidarity and thus a higher pension by investing together and sharing the risks. It is also possible to opt for the Flexible Contribution Scheme, within which an investment profile can be selected. As of January 1, 2023, participants will have the option to withdraw 10% of their pension amount at the time they retire. 

What does the pension system reform mean for APG?

APG wants to provide the funds and social partners with excellent support in the choices they must make about the interpretation of the contract and the method of “entering” (the transfer of entitlements from the current system to the new system). This involves directing and implementing the entire process, converting entitlements to capital, and transferring large quantities of data to new systems. We are working to develop a single system, a single policy and capital administration, in which the new pension rules can be administered regardless of the choices made by pension funds. We are making substantial investments to this end.

Challenging planning that affects the entire company

To ensure that the implementation of the new system proceeds as smoothly as possible, we have started the Pension of the Future program. In this program, we prepare ourselves as a pension administration organization for the new system and we guide and support pension funds in the choices they will face over the coming period. Our goal is to ensure that pension funds, participants, and employers are satisfied. 

Employees must also be able to explain that we have switched to a pension scheme in which the contribution is fixed but the final pension may fluctuate. The participants are used to a system in which the premium changes, but it is clear what the final pension amount will be. This is a major change. The advent of the new pension system therefore presents APG with challenges in the area of human resources policy. The skills and knowledge we need will be even more related to communication and digitalization than they are now. Retraining will become even more important, and our search in the tight labor market will also have a different focus.

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