Annette Mosman started in March as CEO of APG. In the first months of her new position, she wants to gain as many refreshing insights as possible. That is why she walks from Amsterdam to Heerlen in 25 meetings. A journey through the Netherlands of tomorrow, in which someone else accompanies her on each part of the route. Colleagues, but also people outside APG. Like economist Rutger Hoekstra.
Is growth always good? Comprehensive wellbeing economist Rutger Hoekstra from Leiden, has his doubts about that economic mantra. Hoekstra feels it is time to start defining growth differently. He is looking for alternatives that will allow us to measure social progress better. He believes we need a new economic story, in which wellbeing, sustainability and equality are the focus. But how do you make that happen?
What’s wrong with the gross domestic product (GDP)? Not much, Rutger Hoekstra says, as long as you use it to measure whether the economy is growing or shrinking. “Economic growth should not be a goal in and of itself, but that is what it is currently. There is more to life than money. The GDP is not an indicator of wellbeing, wealth distribution and sustainability within a society.” Hoekstra, who is connected to the University of Leiden and the United Nations University as an economist, thinks the current system is outdated. He studies alternatives to the GDP, and also wrote about this in his book Replacing GDP by 2030, which received high praise.
Since World War II, there has been a deep-rooted idea that the economy and growth are important. “A hundred years ago you hardly heard anyone talk about economics or economic growth. The latter term has only been around for fifty years. Now it has become almost a synonym for society. Everyone has an association with it. If the economy is growing it is good, if it is shrinking it is bad. Because of that idea, we are constantly asking ourselves how we can improve the economy, how we can grow faster, and what role we have in driving that economy. In that sense, human beings are at the service of the system.”
However, economic growth is not necessarily good, Hoekstra argues. “It has been very good for our quality of life in the past centuries. And for poor countries, economic growth is still good. There, growth is necessary. But particularly in the Western world, that is not the case. If you are very poor, more money contributes to your wellbeing, but there is a limit to that, research shows. At a certain point you have enough money to live a good life and you do not become happier by having more. Moreover, the current growth goes hand in hand with sustainability problems, such as climate change and loss of biodiversity. In addition, inequality has risen in many countries in recent decades.
By this I do not mean that all sectors should grind to a halt. Industries that are shaping a sustainable future may continue to grow rapidly; that is where pension funds can earn a return, for example. But the mantra ‘growth is good’ does not apply to the entire economy.”
Shift the focus
So what is the alternative? Shift the focus to increasing welfare, sustainability and equality, Hoekstra believes. Those should be the social goals. We can achieve this in concrete terms by, for example, considering a four-day work week throughout the Western world, says Hoekstra. “Over the years, we have started to work less and less. In the 19th century, the common man still worked seven days a week. After the war, five days a week became the norm. But in ten years, four days a week could well be the norm. More free time benefits wellbeing. And with less income, people will automatically consume less, which in turn is good for the environment. That kind of relationship between wellbeing and sustainability is something to think about. Income is just a means of shaping the future.”
The term 'carefree retirement’ suggests a certain standard of wellbeing, but I rarely see it fleshed out
A carefree retirement is also definitely part of welfare economics, Hoekstra says. "Including the present. If you have worries about the future and whether things will work out in your retirement, that can lead to stress long before you retire.” But what does ‘carefree retirement’ look like? That is something pension funds need to make more transparent, Hoekstra believes. “If you only look at it from an income perspective, it is often so abstract. Okay, you get a certain amount, but what does that mean in concrete terms? What will you be able to buy with it by that time? The term ‘carefree retirement’ suggests a certain standard of well-being, but I rarely see this concept fleshed out. You just have to trust that it will be enough.”
And what about equality? Hoekstra quotes writer and historian Rutger Bregman, who at the World Economic Forum in Davos, Switzerland, frankly confronted the rich, mostly tax-avoiding attendees with the instrument to fight income inequality: “Taxes, taxes, taxes”. Especially the rich and multinationals should pay more taxes, Hoekstra says. “We have to put the pain where it’s caused: in the richest part of the Western world. Warren Buffett (one of the richest people in the world, ed.) once called out that he pays less tax than his cleaning lady. There is also increasing public outrage about the fact that multinationals pay so little tax. Bookstores pay taxes, while Amazon, which delivers those same books to your doorstep, pays nothing at all. The current system is not sustainable or fair. Even at the top, people are starting to realize this. The picture is tilting, but it’s slow going.”
Reach an agreement
The current economic narrative, with GDP as its starting point, was formulated by economists after the stock market crash of the 1930s and the war. It was crisis time, people yearned for a way out in which jobs and income were central. That was a decisive moment. In that respect, the corona crisis can be an opportunity to bring a new story into the world. But then there must first be agreement on what exactly that new narrative is, Hoekstra says. “The community suggesting alternatives is far too fragmented. There are hundreds of systems to measure wellbeing, sustainability and equality. The human development index, the broad prosperity monitor, sustainable development goals, the genuine progress indicator, the better life index, etc. And everyone thinks their own system is the best, while the overlap between all these systems is enormous. That is not helpful. For lay people, it’s impossible to make sense of it all. If we can’t achieve harmony among ourselves, there’s no chance of landing a different story with the general public.”
Speak one language
In that respect, as a community, they would be better off following the example of the economists they like to hate so much, Hoekstra believes. “We have to speak one language, just like the economists do. When it comes to terms like import, export, income and consumption, everyone around the world knows what they mean. In 200 countries GDP is measured in exactly the same way. That is clear and effective. We, as a community, do little in return. There are no global definitions for wellbeing, sustainable development or broad prosperity. It’s a mess. That frustrates me. We need to reach agreement if we are ever going to be taken seriously.”
Hoekstra sees a role in this for the United Nations, which also helped lay the foundation for macroeconomic science after World War II. “In fact, the situation in the 1930s was exactly the same. At that time, the UN said: there is not much we can do with this. You have to choose one system. If the UN had not done that, GDP would not have come into being. I think they should start a harmonization process again. The time is ripe for that.”
We need to come up with one worldwide measuring system for wealth distribution, wellbeing and sustainability
Working on harmonization
Hoekstra is currently developing this idea with the UN. “I don't want to give the impression that we have already started that harmonization, but we are preparing to enter the harmonization period. Nobody benefits from this constantly expanding mishmash of systems. We should not be looking at the differences, but at the similarities; working towards a common goal. There needs to be one global measurement system for wealth distribution, well-being and sustainability. I am exploring what the fundamentals of such a system should be, what it could look like. We are calling it the WiSE Transformation Initiative. WiSE stands for Wellbeing, Sustainability and Equity.”
So, one language and one system. With the goal of increasing wellbeing in a sustainable, fair way. What does Hoekstra think the future should look like if that goal is achieved? “That is perhaps the biggest challenge, to make it clear what it means for people in concrete terms.”
A turnaround is already underway in New Zealand, says Hoekstra. “They draw up their budget with the welfare of the population as the starting point. They look at which groups in society are struggling and reserve a portion of the budget for them. All the ministries can submit proposals for how the money should be spent, and each plan is evaluated for effectiveness. In this way, the ministries compete with each another for the best idea. This method has been enormously successful there. New Zealand is also working with other progressive countries in the Wellbeing Economy Alliance. Concrete steps are being taken worldwide.”
Another, smaller-scale idea for a sustainable, fair future comes from England. How do we get people to fly less? Increasing the tax on airline tickets may sound like a good idea, says Hoekstra, but it is mainly the common man who suffers. “People who are very rich can easily afford it and will not fly less. But suddenly Joe Blow can no longer go on vacation. From an environmental point of view, it doesn't matter who flies, but from a sense of fairness, of course it does. This problem was put to a citizens’ panel in England, which came up with a better idea: what if you make the tax progressive? For the first time you fly in a year, you pay a small amount. And for each subsequent time, you pay more and more. That’s a fairer system.”
With respect to sustainability and equality, we as a society are actually already on the right track, Hoekstra believes, “although it could be faster.” Pension funds, he says, can make a big difference by putting the billions in pension money they manage into sustainable companies. “There is so much money involved in that; it greatly affects wherever it is invested.”
In terms of wellbeing, the four-day work week is an example that will appeal to many people. And why do we often retire so abruptly in the first place, instead of gradually working less in phases? “The question is whether it is good, from a wellbeing point of view, to step out of working life cold turkey. For many people, work is more than income. It is also part of social life and the enjoyment of life. In fact, we now write people off very abruptly, from five days to zero sometimes. Surely it must be possible to do that differently.”
What the welfare pillar should look like next is more difficult for Hoekstra to explain. “The best thing would be for everyone to have the opportunity to develop and to live their dream life, within the natural boundaries that our earth imposes on us. But what exactly would that look like? We need more research and social dialogue for that. If we can clarify this more, I think a large group of people could get excited about a narrative of wellbeing, sustainability and equality.”
APG-economist Charles Kalshoven also writes about economic growth in his new column. You can read it here.
How will we be living in 2041? In a series of six articles, we are painting a picture of the Netherlands of the future. How wealthy will we be then? How will we be living? How will we be working? How will we be consuming? How will we be spending our leisure time? In this episode we are wondering: How social will we still be by then?
How social will we be in 2041? Will we still have any consideration for each other? Or will individualization have progressed to the point that we have nothing left for a neighbor? Will there be such a thing as solidarity between rich and poor, old and young, fat and skinny, sick and healthy, man and woman, Dutch person and newcomer? In the media we read about a growing lack of understanding. About groups that are in stronger opposition against each other. Will it soon be every man for himself and shouters before all of us? Since the outbreak of the corona crisis, and especially in times of lockdown, according to the Social and Cultural Planning Office (SCP), we sometimes find it difficult to look beyond the boundaries of self-interest. Take volunteering at the community center or at the sports club. In Europe, we were ahead for a long time, with thirty percent of the Dutch being active as volunteers. In the midst of the lockdown, half of them indicate that they have less time for this. The number of people participating in demonstrations or joining movements has increased. The question is whether we are doing this out of solidarity with those in need or for own interests.
Is our willingness to selflessly do something for others diminishing? According to the SCP (Social and Cultural Planning Office) we are experiencing more hardening in society, but as yet no significant decline in solidarity.
And Trudie Knijn, emeritus professor of social sciences, does not see things in such a gloomy light either. “There are some things we currently can’t do as well for others, but we still seem to be aware of people with needs. Lonely elderly people, undocumented people, vulnerable young people. A charity like the Food Bank has been running at full capacity throughout the crisis.”
Solidarity with whom?
To reassure you in advance: no matter how self-centered we might be in 2041, there will always be such a thing as "passive solidarity”. We all pay taxes. With taxes, the government can put together support packages again during a new pandemic and enforce solidarity with lockdowns. And even if new plagues do not occur, the state will continue to redistribute wealth. The only question is: who gets what? “In a rich country like the Netherlands, the population has traditionally been in favor of social protection for the elderly, more so than for the sick and people with disabilities,” Professor of Social Policy at the University of Leuven Wim van Oorschot tells us. He is working on the question: who is entitled to what, in our eyes? According to him, our feelings of solidarity are even lower for the unemployed than for the sick and disabled. For the poor even lower and for immigrants even lower. Van Oorschot wants to say: not every needy person can count on the same degree of solidarity. In the eyes of the law, everyone is equal, but when it comes to the claim one makes on subsidies or the support people get from institutions or society, some are more equal than others. Widows more equal than divorced women, divorced mothers more equal than divorced fathers, workers with a permanent contract more than flex workers, families more than singles. “Our willingness to help others depends a lot on how we see that other person. And whether we can identify with that person’s needs.”
We judge a needy person's "worthiness to receive help” on five criteria. Control, attitude, reciprocity, identity and need. 'CARIN,' Van Oorschot's own term. We are more willing to help a needy person if we feel that he does not have himself to blame for being in needy circumstances, if the needy person is grateful instead of demanding, if the needy person gives something in return for the help received, if we can identify with the needy person ourselves, and if we think we can estimate the degree of need. “We are conditional cooperators,” van Oorschot says. “We contribute our fair share when we see that the other person is doing the same.”
Worthy of help
Conditional cooperators: I'll scratch your back if you scratch mine. How enduring is this conditional solidarity? Because lately even our solidarity with the elderly has been under pressure. If the elderly make demands on Old Age Security and pension or occupy a large house at the expense of young families, we see them less as "worthy of help". Young people think: those old people don’t have it so bad. They are squandering our money, eroding the foundation of the pension system. The "paradox of redistribution" is what the American sociologist Richard Coughlin calls this. Will solidarity as the basis for the pension system still be strong enough in 2041? And if we are already beginning to feel less solidarity for the elderly, what will be left for migrants? Is the welfare state only “for us”?
These are all difficult questions. This is another reason why we will gladly entrust solidarity to the government in 2041. It does regulate the supervision of the rights of vulnerable fellow citizens. It redistributes wealth. But we must be careful, warns Van Oorschot, that in doing so we also transfer solidarity “as a value” to anonymous institutions. To governments that stand between “donor” and “recipient”. Because as the feeling of gratitude disappears for the “recipient”, the sense of purpose disappears for the “donor”. Solidarity from communal pots can eventually undermine the legitimacy of the welfare state.”
Back to the original question: what will solidarity look like in 2041? More visibly socially engaged pension funds and other, previously anonymous institutions? A social service obligation for young people? Will the government hand out credit points and deductions to volunteers? Or will the business community lead the way? Or social enterprises that combine ideal and profit? Or will it come from within ourselves as the volunteer base ages and there is less volunteering action from young people? Are we going to rate and like each other at socials? In 2041, will we monitor each other's efforts? Will this move towards social control or coercion?
Trudie Knijn conducted European comparative research into people's motivation to join a solidarity initiative and already saw that we are not doing so badly in the Netherlands. Take the Food Bank. Both the volunteer and the end user are interested in the contact, in the exchange. The feeling of belonging to something. It is therefore important that we appreciate an initiator or volunteer and involve them in activities. Many charities date back to the 1990s, when the government left many gaps. They had to make do without support for a long time. Now they get subsidies, but in return they have to comply with procedures. Top down organized organizations. Demarcated tasks, red tape. Government organizations in disguise. That can repel people.
Can we learn anything from the social movements that the SCP thinks we want so badly? We have seen many examples of this on TV recently. Virus madness, farmers on tractors. Angry people standing up for themselves - but also cheerfully dressed climate protesters, Black Lives Matter and moving solidarity actions for nurses. Will we organize solidarity more like a movement on the way to 2041? It could well be, Knijn believes. “Movements strive for impact; their goal is a quick, lasting influence on society. Unlike charities, they are organized flat, from grass roots. There is more democracy and more freedom. Everyone has a say, and every contribution is valued. It gets to the heart of the social beings we will always be: we want to belong somewhere.”
“We want to experience it by actively adding something ourselves, learning, changing, improving, having meaning”
Are sports associations and allotment gardens already using social media intelligently? “There is still room for improvement,” says Van der Aalst. Old-school clubs still have the greatest difficulty in attracting volunteers and members. If they still want to be around in 2041, administrators and bosses must abandon the hierarchical approach, expecting volunteers to provide the hands. During these Covid times, gyms are already proving have a better understanding. They are offering online work-outs and customized programs. But your membership base, or rather, your community, really thrives in loosely-bound connections, as we are seeing in urban culture & sports. There, the adage ‘each one teach one’ applies. Everyone is teacher and student, trainer and player, in an open culture where people respect each other and give each other the space to set up and promote events. In our free time, we no longer want to just passively experience something. We want to experience it by actively adding something ourselves, learning, changing, improving, having meaning.”
The new hedonism
There is that word again, finally. Experience, the experience economy. For a long time, we didn't hear about that promise. It was heard mainly in the tourism industry. We used to want to be mainly entertained on day trips and vacations, to experience things in the sense of undergoing them, but now that is no longer enough. It is a little different now: we now want to participate, to engage. To contribute something positive to the local population by buying local products. Painting in Greece, cooking in Italy, tending cows at a shelter in Estonia, rescuing stray dogs in Bulgaria, helping refugees on Morea. “A small-scale, but rapidly growing form of tourism,” says Richards. In our day-to-day, fragmented time off we are busy driving the children to their activities and fulfilling other social obligations that have to be rushed through. During our two weeks of vacation, we are still too restless to do nothing at the beach all day. That is why we mix lazing around with learning, relaxation with development.”
Thus, our hedonism is joined by ‘eudemonism’. A higher kind of bliss that - according to the Greek philosopher Aristotle - can only be achieved through acts that promote the well-being of others. “This already showed up in the 1960s in tourism,” Bastiaansen says. “Then it flattened out in the neoliberal me, me, me times, but now it’s making a big come-back.”
Van der Aalst is also seeing that an awareness of the climate catastrophe, the depletion of the earth and the degradation of the neighborhood makes more people want to get involved in something. The number of one-person households is increasing, people are increasingly getting away from old social structures. They automatically start looking for new meanings and commitments. This can be done on a small scale, as a buddy or caregiver, but also in groups, by collecting litter together, fishing plastic out of canals, cleaning up the street. It is less every man for himself. We are seeing things less as consumers and more as citizens. But we also want to have fun. I expect that more and more professional events will be created around this, with music, catering, training, and competition elements. Connecting Dutch people and newcomers, allocating budgets, challenging them to develop attractive concepts from diverse cultures together, scaling up the winning concepts.”
“As soon as the furniture stores and amusement parks re-open, the woods will empty out again”
In order to escape all the events and social pressures, the leisure desires of others will be limited to doing nothing. Turning inward, doing things that don't cost anything. At most an hour’s walk in nature, as we began to do en masse during Covid times. But Bastiaansen does not think that this influx into nature is here to stay. “A year and a half of lockdown is not enough to allow nature experiences to nestle deeply in our system. As soon as the furniture stores and amusement parks re-open, the woods will empty out again.”
Richards doesn’t think so. He points to the greatly diminished “social legitimacy” of flying vacations. “Flying is the new smoking. And after Barcelona and Amsterdam, other popular cities will also start banning tourists. So, people will be going on staycations, discovering their own local areas. But nature will pay for that. Will nature be turned into a reserve in order to protect it from the crowds? Actually, we have no nature here at all. No primeval forests or rock formations. In the Netherlands, we create nature, such as the Oostvaardersplassen. Even though they are not open to the public. I foresee State Forestry Services or Nature Monuments putting a fence around our most beautiful forests and charging an entrance fee.”
Just like at the Safari Park, we’ll be riding in quiet golf carts on a track through abandoned fields and pastures returned to nature, where wolves and bears roam once again. Or will that not be necessary? Will we accept that many experiences are no longer real and settle for our VR glasses, safe at home on the couch?
“China already has a virtual zoo, Guangzhou Zoological Garden,” says van der Aalst. “I expect we'll see more of this as we move away from keeping animals in cages, just as we are no longer allowing this in the circus.”
But no matter how virtual it gets, Van der Aalst thinks, we will always want to share our leisure experiences physically with others, in real life. Games, festivals, concerts and events are leading the way in this respect. They are already more hybrid in design, less tied to place and time. Do you remember hunting for virtual Pokémons? That was already one continuous experience. More than just a live stream, the Roadburn metal festival in Tilburg now offers a platform to its loyal visitors, seventy percent of whom come from outside the Netherlands, so that they can have fun together before and after the event. The rapper Travis Scott appeared as an avatar in the game Fortnite for a ten-minute concert, attracted thirty million gamers and earned sixteen million Euros from the sale of merchandise and fees. He would have had to do twenty live shows to earn that much otherwise.”
There are plenty of earning models. Even though we, as well as the artists, are yearning for a live performance. “But even live, the digital will mix with the real,” predicts Van der Aalst. “In the Ziggo Dome we will all be wearing AR glasses while watching Michael Jackson or another dead artist. The ‘real’ very last concert of the Rolling Stones is no longer something unique and one-off. Because there are so many options, we are better informed of where else we can have experiences we like, and we will be going out more and exploring more again.”
Illustration Joyce Schellekens
How will we live in 2041? In a series of six articles, we describe the Netherlands of the future. How rich will we be then? How will we live? How will we work? How will we consume? How social will we still be then?
In this fourth episode, we are asking ourselves: how will we spend our leisure time in the future?
Did you know that out of the 112 hours we are awake every week, we have as many as 44 hours of leisure time? That sounds like an ocean of time to get out and spontaneously do fun things with friends. To go out and explore. But when we look at how we actually spend that free time, aside from lying around on the couch and staring up at the ceiling, a pretty ingrained pattern emerges. According to the Social and Cultural Planningbureau (SCP), 40 percent is used on ‘media use’, 30 on ‘relaxation’, 20 on ‘social contacts’, and the rest sometimes on ‘volunteer work’. Greg Richards, professor of leisure studies in Tilburg says, “And besides our media use, we also limit everything strictly to weekends, because during the week is all about work. The structure we give our live has been the same for the past fifty years.”
Will that still be the same in 2041? Peter van der Aalst, teacher of Leisure & Events at the Breda University of Applied Sciences believes that “by 2014, everything will be merged together”. He believes that the figures of the SCP reveal a dynamic in our leisure time that has been going on for a while. “Everything is mixed together. Twenty years ago, we couldn’t imagine ourselves being connected to the entire world from a small computer on our lap while traveling in a train, arranging a vacation on the spot, based on the opinion of many other people all over the world. Futuristic? These days, we just call it a smartphone and our eighty-year-old grandmother has one too.”
Mixing up free time and work
Not only is the way we spend our leisure time going to blend, but also our work times and leisure times will be merging. In 2014, will we even be able to still distinguish between the two? With AR glasses on, will we be outside somewhere, virtually scrumming with coworkers while we’re actually at home on the couch in our underwear playing a board game with our kids? “It is becoming increasingly difficult to disconnect ourselves from our work,” says Marcel Bastiaansen, professor of leisure and tourism. “As a result, our leisure time is becoming increasingly fragmented: splinters that we no longer experience as leisure time either. It is possible that in the future the amount of leisure time will continue to increase, but not necessarily the quality.”
Is it also possible that mixing up less work and more leisure time will lead us to see our work as something on the side, like a hobby? “I’m afraid that is only true for the creative professions, where we already experience a lot of autonomy now,” Van der Aalst says. “The digital nomads, who provide their communication advice from a sunny resort or a vacation home in Drenthe.” Or will the simple professions also get more free interpretation of their craft? The artist-painter, the cleaner who also arranges flowers and decorates the house differently? Or the other way around: will amateurism and unpaid volunteer work be reimbursed in the future? Transferring the last toads, counting the last butterflies.... According to the SCP, do we really want to spend less of our leisure time gaming online? At least, we are saying we want to spend more time with people physically and we want to do more volunteer work.
“Saying something is not the same as doing it,” Bastiaansen knows. “I do think we will increasingly become more conscious of what we are leaving all around us.” Van der Aalst points out that an important aspect of online gaming already is building and maintaining social contacts. “Often international, worldwide. And who is not in various Whatsapp groups for family, friends, coworkers or communities for specific areas of interest? These often also organize meetings in real life. Our social contact is only increasing, even though it can sometimes be experienced as fleeting.”
In the year 2000, American professor Robert N. Putnam wrote the book Bowling Alone: The Collapse of American Community. Although online life was primitive at the time, he saw how our social structures were increasingly disintegrating, how fewer and fewer people cared about each other. But in 2016, when the Internet revolution was already happening, he wrote an additional chapter to it, describing with hope the many initiatives he saw suddenly emerging. How small communities are reinventing old forms of volunteerism and social activism. Assisted in part by our smartphones.
Housing corporations need billions to make their existing rental homes sustainable and build more homes. Through the auction site LIST Amsterdam they can now borrow money easily and quickly. APG Asset Management is a co-initiator of this fully digital loan platform. “With fifty approved loans worth half a billion Euros, this is already a great success.”
How do you find affordable rental housing if you have a modest income and can forget about buying a house? This is becoming increasingly difficult in the Netherlands. Tenants often have to wait years to get a home. That is why the housing corporations want to build about 34,000 more social rental homes each year; that is double the amount they've had built in recent years. In addition, the pressure on housing corporations to make their (more than two million) existing homes more sustainable is increasing, because in 2050 all housing corporations must be CO2 neutral.
New financing source
That can only mean one thing: the 300 housing corporations in the Netherlands will need many billions in the coming years. How will they get that money? Rent increases offer little solace because rents in the social rental sector are capped. In practice, the corporations now borrow money mainly from two sector banks, the Nederlandse Waterschapsbank (NWB) and the Bank Nederlandse Gemeenten (BNG). “A third source of funding has now been added with the platform LIST Amsterdam. Through this online marketplace, corporations can apply for a loan very easily and efficiently, compare the offers from institutional investors and take out the loan that is most favorable for them,” says Hans van Westrienen, senior portfolio manager of APG Asset Management.
Taking advantage of the platforming trend
He explains that APG was approached a few years ago by Amsterdam-based entrepreneurs Adriaan Hendriksen and Erik Wilders. “They saw opportunities for an online lending platform where housing associations could make direct contact with institutional investors for their financing needs. Without all kinds of intermediaries, such as brokers; that immediately saves a lot of money. We thought it was an excellent idea and helped them set up this platform.” In doing so, LIST Amsterdam is responding to the trend of platformization: after all, we have become accustomed to online platforms for ordering food, arranging a cab or an overnight stay, or hiring a handyman. Lending money through crowdfunding platforms like Geldvoorelkaar, Kickstarter and Voordekunst have been around for years, but a platform for large, long-term loans is new, observes Van Westrienen: “It’s simple: the housing association puts in its request for money directly to institutional investors via LIST Amsterdam. Regular banks are not involved.” Wouldn’t APG have wanted to set up this platform itself? “No, in this case the rule is: stick with what you know. Setting up an online auction site like this is also subject to strict conditions, based on legislation and regulations.”
More competition, lower interest
The platform clearly meets a need: after two years, some fifty loans have been traded through LIST Amsterdam, with a total value of half a billion Euros. Why is APG participating? Van Westrienen: “We are happy to make these investments through this platform because our clients, the pension funds ABP, bpfBOUW, SPW and PPF APG, not only want to provide long-term loans with a stable and reliable return, but also want to contribute to solving the housing shortage and making homes more sustainable. Moreover, they want to invest more in the Netherlands where possible.” Van Westrienen has had a lot of praise from the housing corporations. “They can now choose from more financiers. And because there has been more competition, the housing corporations pay a somewhat lower interest rate than before.”
Return, risk, costs and sustainability
APG usually bases its investments on four criteria, Van Westrienen explains: “The risk, the return, the costs and the sustainable, social character of the investment. We certainly meet the last criterion - by investing through LIST Amsterdam - given the desire of housing associations to use these loans to build more rental homes and to make existing homes more energy efficient.”
As for the risk; the Dutch State guarantees this type of long-term loans to housing corporations. This is done through the Social Housing Guarantee Fund (WSW), a construction that is interesting to institutional investors like APG. "Because of this guarantee, the risk for us is low. The interest rate on these loans is slightly higher than on Dutch government bonds, so on balance we can realize a slightly higher return at a comparable risk. At the same time, the return on these low-risk loans is relatively low, which makes them less attractive to the ordinary large banks. But that low return is not a problem, in part because by investing through LIST Amsterdam, we score so well on the other three criteria.” And what about the fourth criterion, the costs? “Those are relatively low, because the whole auction process is automated and very efficient.”
Simple, digital security system
This automation is possible in part due to extensive standardization, Van Westrienen explains. “Normally, you can incorporate all sorts of tailor-made options into these kinds of large loans. For example the option of early repayment, a variable interest rate during the term, or an annuity structure. With the loans through LIST Amsterdam you only have to deal with a template on which you can enter the term, the amount to be borrowed and the interest rate. That’s very straightforward.” The system works surprisingly simply: at eleven a.m., on fixed days during the week, investors are shown a template on which corporation X has indicated how many million Euros they want to borrow. Interested investors then enter the interest rate they want for that loan. The corporation then gets five minutes to tick which interest rate they prefer, and thus automatically which investor they will go with. And then the deal is done. “We have no contact with the housing corporation in question. We used to process these types of investments manually in our administration. My coworkers in Trade Processing, together with our Integration team, have ensured that everything runs digitally and in a standardized way. Even the signing of the required signatures by all parties is now done electronically, via AdobeSign. Especially now that almost everyone works from home, this is extremely convenient. This digitization means fewer errors, more speed and lower costs. Good news for the housing corporations and for our clients and their participants that we invest for.”
“LIST Amsterdam is very good news”
Housing corporation De Alliantie was the first to take out a loan through LIST Amsterdam in 2019. Jan Michiel Aeilkema, treasurer at De Alliantie, said this about it on the ABP website earlier this year, “It is our mission to ensure sufficient social rental housing. In our case, ninety percent of our stock consists of homes for which rents are capped. We can’t just raise those rents to pay for sustainability, for example.
We try to borrow money as cheaply as possible, at the lowest possible interest rate. Because we don't need brokers when we work through LIST Amsterdam and many processes are highly automated, we also have fewer expenses when attracting funding this way. And if we don’t like the offers we get on the platform, we can always approach the sector banks.”
What does Aeilkema think of LIST Amsterdam? “For housing corporations, the social housing market and the large group of people who depend on it, this is very good news. The cheaper loans and lower costs mean that we can keep housing affordable and make it more sustainable. So it's a very good thing for the Netherlands.”
How will we live in 2041? In a series of six articles, we sketch the Netherlands of the Future. How rich will we be? How do we live? How do we consume? How social are we still? How do we spend our free time? In this third episode, we ask ourselves: how will we work in the future?
Working in 2021: that means sitting and waiting in a building from nine to five. That is, if we are still allowed to come into the office during a pandemic. At the office, we think of home and at home, we long for the office. But American futurologist Thomas Frey believes that in 2041, after two more disruptive virus pandemics, the many vacant offices have now been converted into homes. And because the government still, to our despair, demands that we work at home, at the kitchen table with children, we have found a solution, according to Frey.
"By then, we'll be working from a mobile office. Everyone enjoys peace and concentration in their own, renovated camper. A mobile workplace with darkened windows and stable Internet. Can be set up at will as a workplace, film studio, tattoo parlor, a base for a raging reporter, pawnshop, fertility clinic or simply as a mobile office for a knowledge worker. Our desk on wheels is full of technology and robotics, with whom we chat just as pleasantly as with that colleague at the coffee machine. Algorithms propel us through the day, dots on the horizon markers keep us focused on the goals. As a moving billboard, we advertise our business, pick up an appointment for a meet-up and drop it off before the next one starts. Although we mainly meet virtually, with VR lenses that immerse us in a laboratory in India, or with AR glasses that lay a layer over the production facility to be renovated in China."
Okay. Let's just take a step back. We'll try to hook up with Frey again later. We will still need his optimism, because we will first dive into the prospects of the 'knowledge worker' with philosopher and digital fitness pioneer Martijn Aslander. And those prospects aren't particularly rosy. "In twenty years, most of the Netherlands will call themselves knowledge workers," says Aslander. 'We all gather, process, analyze, cluster and share knowledge all day long. But hopefully, we'll go about it a bit smarter than now.
At the moment, the knowledge worker works as if he were a conveyor belt worker. Someone who delivers a certain production on one specific working day. While his best ideas are born in the shower, we expect him to spend all day looking at a screen. We're effectively forcing him to put on a play.
According to Aslander, those days are coming to an end. "We're in these hip open-plan offices with slides, once forced upon us by old gurus of 'the new way of working'. Disastrous for our concentration. All day long, we're distracted by stimuli and talk and get nowhere. Take our working hours, for example. Twenty percent of us are at our best in the evening, whereas twenty percent function optimally in the morning at seven o'clock. Then why do we judge each other on fixed working hours? No wonder so many people suffer from stress and burnout, public health enemy number one."
Didn't the 1950s promise us that automation would take a lot of work off our hands? Why does it take so long before we can spend our days in idleness? "Simple," says Aslander, "we've been standing still for seventy years. At the time, we sat at a desk with some drawers, a couple of mail trays, a telephone with a cord, and a typewriter. Now, we're still tapping a keyboard - with two fingers, because we've never learned to touch type. We use a plane to drive on the highway."
Aslander made a study of the errors of the knowledge worker. He says we create documents throughout the day, send them to twelve others who make changes to them, and then save the new version separately. "We think this is work. One phone call down the line and we have a perspective that immediately renders the latest version worthless. In between all the time confetti - checking e-mail, texting, tweeting, chat - we shove around paper and put it away in folders and sub-folders, which all look alike. We hide bits of information all over the place, like squirrels do with acorns. But… where did we put it all? Our spatial and visual recall is the most highly developed skill of our brain, but it's not being used."
Aslanders' point: we have forgotten the purpose of work. We confuse it with a fifteen-year steady job doing the same trick. Okay, we network more than before and we now meet standing up and we scrum agile. "But what are the benefits if we can't access the right information right away? A quarter of our energy is spent on thinking. It's a shame to spend that on tracking down that one observation, that golden idea that you sent yourself in an e-mail last week."
When we put money in the bank, Aslander says, our monetary capital grows. But we put our information capital in an old sock. We hide that sock under the mattress so that no one can reach it, including ourselves. "In the meantime, the amount of information that comes our way every day is increasing rapidly. We must therefore process information more intelligently. But we don't learn that skill at school or in organizations. If knowledge work is a craft, few have mastered it. Most of us just plod along. Which of us has adapted to the dynamics of 2041 in time and survives the competition? I think the speed and ease with which you're of value to others will determine your success. Take care of your information capital and your social capital, so that you are less dependent on monetary capital."
In the meantime, our employers are preparing for the digital future by delving into AI, Big Data, blockchain. Exciting developments, according to Aslander, but pointless if employees don't even grasp the finer points of Outlook or Excel. "We're not digitally fit. We can't even deal with the tools we currently use: an Ikea set of Allen keys to build an entire house with. If you look at our work tools from the future, most of them will drop out. Tools must store information, be searchable, sortable, able to organize, reorder, metadatable, and shareable. I use Evernote. I scanned everything I had using a super scanner, 93,000 notes in total. I found my swimming certificate and that particular taxi bill from 1989 in just a second."
Welcome to 'the new work reality'. Only when we have the basics in order and comply with a minimum of digital hygiene, if we can access everything immediately and everywhere and have knowledge and connections ready - then we'll be ready for the skills we can use to distinguish ourselves. Now and in 2041. "Thinking critically, being creative, doing business, communicating, working together," says Aslander. "Only then are you the solution to someone's problem. That's when you score in the elevator pitch, the boardroom, at a birthday party."
Great for people with high-quality work at the top, but what will automation do to regular jobs in 2041? In 1867, Karl Marx predicted that the importance of the factor of low-grade work would continue to diminish. Shortly afterwards, engineer Frederick Taylor divided the work at Henry Ford's automotive plant into separate, endlessly repetitive tasks on the assembly line. And while in 2021, automation continues where industrialization left off, and we're still micromanaged by technology in call centers or as a food delivery service, one in four people experience their job as useless and meaningless. 21 percent of all work is performed by machines. By 2025, this will have risen to over fifty percent. Was Taylor trying to turn us into robots? Now we fear that robots will take jobs.
What is work, really? "Work," said the philosopher Voltaire, "saves a man from the three great evils: boredom, sin, and desire." For a long time, we saw work as a Christian duty: we earned our living by the sweat of our brow. Now, we see work more as a duty to ourselves - we want to develop. We get meaning from efforts, enjoy getting a job done. What will be left of that by the robots in 2041? Will the little work there is be something 'for on the side'? Will we be dutifully earning our money to waste our time in philosophizing and the arts, as the ancient Greeks did?
"Task by task, our jobs are automated out of our existence," Thomas Frey acknowledges. "So will we still have our jobs later? Of course! Just not that job. Contrary to what we fear or fantasize, an era of super-employment awaits us." And not only that: Frey thinks that robots will make our work more fun. "They take over mundane jobs such as cleaning sewers or scrubbing toilets, but in most other jobs, we work with them as equals. My reason for believing that? An unimaginable amount of innovative technology awaits us. Hundreds of thousands of micro-industries have emerged, with work for hundreds of millions of people who are going to reshape life."
Moreover, in 2041, we see a revaluation of old professions, Frey believes. "The teacher, the coach, the journalist: these are the vital professions of tomorrow. When all the answers are available in the information society, asking questions becomes essential. More than ever, it's about trying things out, messing around, failing, reflecting and continuing to practice. Things that a robot can't do very well, but we can. In which professions does that happen? In journalism, we're still working as a raging reporter or as a brilliant news analyst, in addition to the robot fact-checker. But there are also data detectives and data ethicists. Robot personality trainers and drone traffic controllers. AI accountants, 3D homebuilders, cryptocurrency regulators, sensor troubleshooters, aerospace impact controllers, asteroid miners, gene therapists, mixed reality coaches, cultured meat designers. And yes, there will also be a lot of work for interior designers - for our mobile work camper."
How do you survive as a pension administrator of eight funds in a year overshadowed by Covid-19? Annette Mosman, our recently appointed CEO, believes it was the ultimate test case and that APG really held its own through it. “In 2020, employees started working from home overnight, we kept the pension administration of 4.7 million participants running from three thousand home offices, and we didn’t panic when the stock market fell hard. We turned out to be a robust, agile organization.”
A new CEO, a new sound? What will we notice about Annette Mosman’s approach?
“I’m starting this job with a clear premise. I am from within the organization, and I know the sector. As CEO, I am going to do things my own way: often by listening first and reacting later. I am always curious about other people’s visions. Accents will shift, but the route is rock-solid. First of all, we are going to perform really well. The coming years will be geared towards the end result: implementation of the new pension contract (NPC), in collaboration with our funds, in 2026 and being a strong social player at the same time. Because we are doing this for the financial fitness of 4.7 million people. To reach that goal, we will have to be consistent in the next few years: eyes on the ball and do what we have agreed on. We have to do it right: with our attention on our funds, employers and their participants, on each other and on our environment. We are in this for the long haul and the trajectory will have its ups and downs.”
What will be the highest priority for you in the next while?
“Our established strategy for the coming years. Our focus is now on its execution: introduction and implementation of the NPC is our first priority; everything comes after that. We will be making clear choices and carrying them out superbly. We will be doing that with a strong social profile: we are inextricably linked to the 4.7 participants of our funds, with employers and with other partners in society. If we do our job well, we will be a thought leader as a pension administrator and a key player in the sector.”
This is the first annual report where you are the CEO. Transparency plays a central role in the report. Why was that decided?
“For the second time in a row, we are publishing an integrated report. In it we show what value we add to our stakeholders: our clients, society, shareholders and the funds. We are aware of our role and are taking a critical look at it. This is the main theme of this annual report. We are not an ordinary company. We work for 8 funds and 4.7 million participants and manage almost 600 billion Euros. In addition to being a learning organization, APG also focuses on the social impact we have. Being transparent, like we are in this annual report, means that we are also showing our vulnerability and therefore also showing what did not go right. If something is wrong with out execution, or the collaboration with the Works Council is not running smoothly, we will communicate about this.”
The road to the NPC is long and complex. What exactly does that road look like now?
“We don’t want to be faced with any unpleasant surprises when we start the transition to the new pension system with our funds. That is a crucial component of our strategy and that is what our clients expect from us. It is also a precondition for transitioning to the new pension system. Compare it to an attic you need to clean out before you move. In our case, for example, that means working with our funds to tackle the complexity in the current plans. But it also means going through the pension administration and fixing it if something is unexpectedly wrong somewhere. Fixing this is complicated, especially when it has an impact on people’s wallets. In collaboration with the funds, we are trying to find solutions that are in the best interest of the participant.”
We play a certain role, but we never do this alone
What does that mean for APG in concrete terms?
The transition to the new pension contract will affect the work of almost all employees within APG in the coming years: from IT, pension administration, asset management, risk management, client contact and communication to HR. It will change our work in almost every respect. This will demand a lot from us as an organization and from our employees in the coming years. At the same time, it offers APG the opportunity to show that even in a new system we can live up to our position as a leading administrator. Because we are a leader in our field for good reasons. With our digitalization, participant orientation and pension expertise, we have all the ingredients needed to create a new proposition and to measure up to other financial parties. We also have eight loyal clients who are going to go through this process with us. So, let’s not stare into the headlights, but get on with implementing.”
In the past year, things went wrong in the execution a few times. How do you look back on that?
"That’s true. In August 2020, for example, an action surrounding the disability pension was completed. In the process, a total of 8,352 participants were retroactively awarded the pensions they were entitled to. Some 8,500 participants also received a rightful supplement for coinciding periods of service. For the participants in question, this made a big impact. And as a pension administrator, we understand this very well. That is why we are doing everything we can to carefully inform participants and assist them in these kinds of situations. And we also learn from them. Over the past year, despite the Covid-19 pandemic, which forced us all to start working from home, we have improved our processes enormously and where there were problems for participants, we have solved these as quickly as possible.”
Is the chance of errors really going to be less now?
The store is being renovated while sales continue. It seems like Covid-19 barely affected APG.
“The switch from office organization to home-based organization went smoothly. Operations - including paying pensions, collecting premiums, investing - were not compromised at any time. Pension fund clients, employers and participants hardly noticed that we supported or spoke to them from home instead of our offices. And in many cases, we are still doing that. I am very proud of that.
There is a lot of talk about APG’s role as a social player. How is APG going to fulfill that role in the next period?
“APG is a company, but it is really much more than that: as the biggest administrator, we play a certain role, but we never do this alone. If we do our job well in the coming years, other parties, such as funds, will want to collaborate with us and join forces with us. At the same time, I want to look beyond that: because with our knowledge and skills, we could mean a lot more for people and for society. Financial security affects your health, your wellbeing and your opportunities. Your pension is not a stand-alone thing. That is why I want to seek more connection with social partners, for example, around themes like health, financial education and poverty reduction. APG employees can actively contribute to that. Taking care of our environment means also taking care of the planet. We are investing with a view of the long term and in as sustainable a way as possible. Our operations will be climate-neutral by 2030. That is why we are moving to a new, sustainable building at the end of the year. And we are working on a new mobility plan for all APG employees. We will be looking without any dogma at what is good for us and for our environment.”
Finally: what are you looking forward to most in 2021?
“Seeing coworkers again and being able to go back to the office. But I'm also looking forward to the steps we're going to take towards the new pension contract. That is really a very complex process. So, I hope that the politicians in The Hague will stick to the established timeline. I am still assuming that on January 1, 2026, all funds will have to make the transition, and we really need that time.”
Read the interview with Ronald Wuijster, board member and person responsible for Asset Management and HR: “Selling from a sense of panic is never a good idea” - Ronald Wuijster on investing during a Covid year.
Today, APG publishes its annual report for the year 2020. For APG, pensions are about people, life and living together. We want to make a difference and ensure a good income, now and later. Our 2020 annual report describes how we have worked on this in the past year; for eight pension funds, 22,000 employers and through them, for 4.7 million people in the Netherlands.
Key points for 2020:
- Despite the COVID-19 pandemic, the operation, including paying out pensions, collecting contributions and investing, was never jeopardized.
- Customer satisfaction has grown again
- We have given more people insight into their income for later and their pension assets
- We have outperformed the market index, and the price per participant has again fallen. As such, we contributed to achieving more pension value for the members of the pension funds we work for
- In 2020, together with the pension funds we work for, we started preparations for the transition to tomorrow's pension. Among other things, we have made progress in the fields of automation, innovation, streamlining of processes, simplifying and cleaning up the pension administration and further increasing the participant focus.
APG achieved a 6.6% return and an additional return of 94 basis points for its pension funds and their participants in 2020. At the same time, APG succeeded in lowering the average price per participant to € 66.30. Also, APG provided 1,015,000 participants with insight into pension assets and 1,965,000 participants with insight into income for later. APG's turnover in 2020 was more than € 762 million. The net result came to € 42 million. APG's reputation score rose to 72.6 in 2020.
View the full APG 2020 Annual Report here as pdf or visit our special website.
Tomorrow, at apg.nl you can read the interview with Annette Mosman (chairman of the APG Board of Directors) and Ronald Wuijster (member of the APG Board of Directors, responsible for Asset Management) about the annual report.
How do you deal with work and money for now and in the future? Do you live from day to day or are you deliberately planning your financial future? And do you arrange ‘later’ yourself or are you a member of a pension fund?
Brenda Elgersma wants to stop working at the age of sixty.
Brenda Elgersma (49)
Profession: Operational expert at the police, municipal councilor and marriage officiant.
Weekly works: More than fulltime
Income: Between 3000 and 3200 euro net in paid employment and a fee of 750 euro net as municipal councilor.
Savings: 20,000 euro
Pension is arranged? Yes
What kind of work do you do exactly?
“I work at the police as a manager of the Regional Service Center since 2019, the control room of the Amsterdam police where all ‘not urgent, but police assistance required’ reports are processed. I have been working at the police for 22 years already and previously carried out my policing duties on the streets as a regular police officer. In addition, I started working as a municipal councilor seven years ago for a local political party in Uithoorn. This is my final year in that role though as I will call it quits. Being a municipal councilor takes up a lot of time which is at the expense of the time I am able to spend on my passion: marrying people. I became a marriage officiant three years ago and that to me truly is the thing I like to do most.”
It sounds as if your weeks consist of more than seven days…
“People sometimes ask me how I make the time to do all of this. I don’t sleep in and barely watch TV which means there’s plenty of time left. I work 36 hours per week at the police and that’s a fulltime position in this profession. I spend approximately one day a week on my work as a municipal councilor reading documents, work visits, meetings with the political group, committee meetings and council meetings. My work as a marriage officiant has come to a standstill for now, due to the corona pandemic. I usually spend between 10 and 15 hours on a marriage and I sometimes conduct no less than three marriages in one week, which is also my limit.”
How much do you earn?
“People don’t get rich working at the police. In the years working as a patrol officer I sometimes thought: Is this why I work all of those shifts in the weekends and nights? But now, being a manager, is the first time I am actually quite happy with my salary. I earn between 3000 and 3200 euro net. I also earn a fee working as a municipal councilor of 750 net per month, but the tax authorities consider that amount income so that only leaves me 600 euro. And money is definitely not a reason to become a marriage officiant either. I earn 90 euro gross for every marriage I conduct on behalf of the municipality. That leaves me with 60 euro net for each marriage following the deduction of taxes. It really doesn’t involve a lot of money. When people hire me outside of the municipality, I can charge more. I charge 250 euro, excluding travel expenses, for those marriages of which I donate 100 euro to the Diabetes Fund - my son suffers from diabetes type 1. It is not about the money, I just really enjoy doing it. If people can’t afford me, that’s fine by me as well. In that case I am happy with a slice of the wedding cake.”
Is it enough to make ends meet?
“Yes, it is. I am married to Peter who has been working at the police for all of this life and who is about to retire at the end of next year. Peter is 62 years old and only works 24 hours a week these days. His net income is 2800 euro. We spend about 4000 euro a month on fixed costs and groceries. So, you can do the math. We save quite a lot of money these days. We had to cancel our trip to the United States and we can’t go out for dinner. That’s why we moved the renovation of the bathroom forward.”
What else do you spend much money on?
“I visit the nail studio every three weeks, the beautician every six weeks and the hairdresser every eight weeks. Those are the luxury things I allow myself. I also buy a new car every three years. I am driving a Hyundai i30 fastback at the moment. The most expensive version, truly a beautiful car. I really enjoy all of that but I never forget where I came from. When my daughters and I were on our own for a few years after my divorce over twenty years ago, I really had to think about every dime I spent. I drove an old Atos back then and that too made me extremely happy.”
How much did you save?
“20,000 euro. We don’t want to save any more as the interest rate on savings is close to nothing. When we have money left, we rather spend it on additional mortgage payments or use it to maintain our house. We don’t spend our savings. Last year, the heat pump in our house broke down and had to be replaced at the amount of 10,000 euro. We took out a personal loan to pay that bill and we paid off the loan early. Why don’t we just use our savings for that type of costs? Well, it just feels right to have some money to fall back on in case something happens. You never know what the future holds.”
Do you invest?
“No, we don’t feel the urge. To us, that feels a bit like gambling away our money.”
What is your pension plan?
“I want to stop working at the age of 60. We are able to save hours at the police which can be used after saving an entire year worth of time. I want to have that year started at the age of 60 and then move my pension forward to the age of 61.”
What do you arrange to accomplish that goal?
“We take a look at our finances every year in December and make a plan based on those findings. Are we still able to succeed in what we want or do we have to start doing something else? Are we looking to have things done on the house or do we want to make additional payments to pay off our mortgage?”
How much would you like to receive per month following your retirement?
“I think about 3000 to 3500 euro would be enough to live our lives the way we want.”
And how much do you receive should you retire now?
“We both have a good pension at ABP. If I stop working at the age of 61, I receive approximately 1400 euro but that is enough. Our joined income would in that case be about 4000 euro per month.”
What are your dreams for the future?
“Once Peter is retired, we want to make a tour in Spain of five weeks. We also fantasize about renting a house in Spain for a major part of the year or even buy a house there. We want to explore a lot, go on great trips. The twenty years of us being together were mainly dominated by developing a career and raising children. We are now at the beginning of another stage in our lives. We really enjoy fantasizing about the future, but there’s always a risk of thinking about the future so much that you forget to live in the now. You know what it’s like? If your career has led a few times to having to tell people that their son, daughter, father or mother is not coming home, you don’t easily take things for granted anymore. Of course you can make plans for the future but as soon as I walk out the door, there’s no certainty I will also return. That’s the reason for us to try and enjoy every day of our lives.”
What else could you still improve in terms of pension?
“The great thing about working in the public sector, is the fact that pension has been arranged properly. That means there’s not a lot for us to improve ourselves. However, I would like to make my children - two daughters at the age of 27 and 26 from my first marriage and a son at the age of 15 with Peter – more aware about the importance of a good pension. When I was their age, I also didn’t think about pension that often but accruing pension through your employer is not as obvious anymore for their generation as it was for ours. I try to provide them with as much as possible healthy financial knowledge.”
In a time of increasing global protests and with the Dutch elections just around the corner, I like to look at the ‘alliance’ between the free market and the democratic rule of law.
The economists Acemoglu and Robinson discuss the economic and political institutions in their book Why Nations Fail. Those institutions can be inclusive - everyone is allowed to participate - or exploitative. In the latter case, an elite group is draining the rest in terms of prosperity or control. One of their thoughts is that economic freedom and political freedom mutually reinforce one another. My question: is it still a happy marriage?
Why would political and economic freedom actually go hand in hand? A part of the story is (in)equality. In a rather unequal society, rulers have to implement weightier resources in order to defend their property. Economic freedom is threatening, as it also entails more competition. And before you know it, political freedom leads to reallocation. If a country (nevertheless) develops, a middle class arises that wants participation and tries to enforce certain rights. Their success, if achieved, is also beneficial to the economy. Entrepreneurs in a democratic rule of law, have to be less concerned about someone else benefitting from their investments.
And that's how we continued to have a clear world until the end of the Cold War. You either lived in a democratic nation with a free market - and at the same time a wealthy country - or you were restricted in both your economic and political opportunities and you would be poor.
The major deviation from this delightfully clear picture is China. We all know that the economic rise is unprecedented. But political freedom is not particularly part of the success formula. The Dutch republic showed success in the seventeenth century - much to the dismay of surrounding monarchies - thanks to the combination of economic and political freedoms. In turn, the Chinese show the world that a lack of freedom doesn't have to stand in the way of wealth. That's an example of which you hope it will not be replicated on a large scale.
Yet, the question is whether or not the success has a continuing status. Migration from rural areas to the city - an important growth engine - will come to a standstill someday. And there's also another reason to doubt the durability of the Chinese model. Acemoglu and Robinson state that the combination of authoritarian leadership and economic freedom is far from stable. It can go two ways. It is possible that increasing prosperity leads to increasing participation. That means it will become a free market democracy. But it is also possible to slip into unfreedom on both fronts.
Even the stable alliance between democracy and the free market can be undermined. Growing inequality can feed social dissatisfaction. And the free market can generate a lot of fake news. That has been an important factor for the storming of the Capitol on January 6th. There is no economic law determining that the most objective communication sells best.
We can therefore not just expect that everything will turn out for the best once you have economic and political freedom. That's a good thing to remember in this period of election. The election programs - but also society - pay much more attention to inequality these days. That also helps in keeping the free market and the democracy together. You ask me if I have an appropriate voting recommendation when election day has arrived? Absolutely. Make sure to vote!
Charles Kalshoven is senior strategist at APG
What will 2021 bring in economic and political terms? What will happen with the new pension contract? And with which innovations does APG respond to this? Five APG specialists tell us about their anticipations.
When the lockdown is over, you don't suddenly go to the hairdresser three times in a row"
"I assume the economy will do better in 2021 than it did in 2020. But I do keep my options open. How often will the lockdown be extended? What is the impact of the coronavirus mutants? How smoothly does the vaccination process go? There's still a lot of uncertainty. If everything goes well and we get the virus under control quickly, there's a bigger chance that governments will phase out the support measures and companies will still have to pay tax. Which in turn can lead to a wave of bankruptcies and rising unemployment.
Sentiment in the stock markets is still surprisingly good, helped by the low interest rates and the intervention of governments and central banks. Even though entire sectors were paralyzed by the lockdowns. But those stock prices don't tell the whole story. Don't forget, SMEs and freelancers aren't listed.
It's not just the stock prices that can go either way, the same goes for consumer spending. On the one hand, many permanent employees have been able to spend little money since corona; perhaps they'll start spending a lot again as soon as the shops and the catering industry reopen. But then again, that catch-up demand will be limited: you don't suddenly go to the hairdresser three times in a row. Or eat out every day. On the other hand, some people are financially stuck or keep a tight hand on the purse strings because of all the uncertainty.
Hopefully, once most people are vaccinated, consumers and businesses alike will start spending more on major purchases or investments over the course of this year. Then the global economy will gather steam again. And we may even get to a point where inflation temporarily rises due to bottlenecks. But interest rate hikes by central banks are really still a thing of the future. On the positive side, gone are drawn-out problems like Brexit, and the question of who will be the next US president. I expect a positive stimulus for global climate policy from Biden."
This year, we'll investigate how high or how stable people want their pension to be"
"There is quite broad political support for the Pension Agreement. In addition to the coalition parties, Groen Links, PvdA and SGP were also in favor. So whatever the composition of the new government, that new pension system will most likely come. Despite the fact that political parties - now that the Rutte III government is outgoing - are no longer bound by the coalition agreement.
Several important milestones towards the new Pension System are planned for this year. For example, anyone can now respond online to the "future pensions bill". This consultation round will run until February 12th. This bill is part of the broader Pension Agreement. It includes the new rules for the pension accrued by the employee and employer. The responses from this Internet consultation will be used to improve the bill so that the law can take effect in 2022, as soon as the House of Representatives and the Senate have approved. After that, the social partners and pension providers have until 2026 to switch to the new system.
The pension sector hopes to receive details about the new pension system and how to get there as soon as possible. At APG, we will of course see whether the system can be explained and implemented. We also look at possible implementation risks and the best way to deal with them. In the new system, the pension will be more directly in line with what is happening on the financial markets. This year, we'll be investigating what people think of this, and "how high versus how stable" they want their pension to be. We want to facilitate pension funds to meet the wishes of pensioners and employees as closely as possible. That's why we'll be discussing this with them this year. I think the great thing is that the new system is becoming simpler and easier to explain.
APG is going to collaborate more with other companies, because together, you really do know more"
With the arrival of the new pension system, a lot will change for employees and pensioners. They will have their own pension account into which the pension premium will be paid. You save for yourself, see the fluctuations in your own pension fund. A complicated change. We have to divide the total assets of over 1500 billion euros fairly over millions of personal pension assets. The new pension scheme will be less complex and easier to understand, but getting there still throws up many obstacles. Things like adjusting ICT systems, legal issues, you name it. Fortunately, we still have a few years.
All pension players have to deal with this. That's why APG is increasingly collaborating with pension funds and other pension providers, such as PGGM and MN Services. Not only to collect premiums together and to pay out pensions, but also to learn from each other and save costs. And to find out how we can best communicate with our participants about the coming changes.
In the coming years, people will have plenty of questions about their financial future. They are increasingly in need of a guide to help them with user-friendly solutions and tailor-made advice. Who gives them control over all their financial affairs and prepares workers well for the transition to retirement, for example.
To be able to work in a more customer-oriented way, we want to collaborate more in the coming years with specialized companies with whom we can develop apps, devise new ICT solutions or use data more intelligently, for example. Such as a digital planner that gives you an instant overview of your financial future. Together with other companies, from startups to Nibud, we want to ensure that, as a working or retired person, you can use all kinds of data to see, for example, how much money you will need later on for any desired standard of living. Reasoning from your current lifestyle. We know from research that employees often overestimate how much money they really need later on.
Thanks to cloud technology, we're increasingly able to get the most out of our data"
Innovation specialists Tom Romanowski and Anne-Marie le Doux about innovations and APG's innovation lab.
Tom Romanowski: "Under the new pension contract, every participant will soon have their own, personal pension. This is in line with the social trend towards more individualization. The sector is facing the necessary challenges.
Pension administrators such as APG are now working on all kinds of innovations. And technology continues to increase the possibilities. For example, thanks to cloud technology, we can get the most out of our data in a secure way, without this being at the expense of the privacy of participants. For instance, machine learning helps call center employees so that they can better predict the participants' follow-up questions.
Participants will be given more responsibility and will need advice when making financial decisions. Partly for this reason, APG has already launched Kandoor.nl, where you can get answers on all conceivable financial questions."
Anne-Marie le Doux: "We come up with these kinds of innovative solutions in the GroeiFabriek, APG's innovation lab. In this breeding ground, we focus not only on participants and pensioners, but also on employers and the pension funds that are customers of APG. Employers, for example, they want to know how they can help their employees to be better off financially. Together with a number of employers, we've developed an online platform that enables employees to learn more about their 'financial fitness score' and help them set realistic goals to improve them. And this year, we're also working on innovations that enable employers to make better HR decisions."
Rapper Typhoon hopes every single coworker is going to be feeling responsible for diversity
Putting diversity and inclusion on the agenda is number one. Giving employees the space to co-decide on the topic is an important second step. With that message, rapper, language artist and keynote speaker Typhoon is visiting companies in the Netherlands, such as, online, APG. “Inclusion should be woven into the corporate culture.”
When you visit companies, you get a look behind the scenes. What have you been seeing?
“I’m seeing a variety of initiatives. Equal pay for men and women, applying for jobs anonymously, education and training throughout all the layers of organizations. And often a social stand is taken externally as well, by raising the rainbow flag or participating in a Gay Pride event. I see the willingness and urgency to really make this theme part of the company culture and strategy. APG can count itself among the vanguards in the movement and fighting spirit forward in this. Employees are driven and want to go deep. And that is what you want to achieve as a company. The words ‘diversity’ and ‘inclusion’ really make my skin crawl when they’re used as an end in and of themselves. When they’re on the agenda, just to be checked off. A quarterly financial report is something you can check off.”
Sounds like the working world is doing well in the Netherlands with respect to diversity and inclusion.
“Serious time and attention is being put into it, which is good to see. And, don’t forget to celebrate what’s already there, as well as the effort. Then, as a company, you don’t always have the feeling that you are lagging behind and have to catch up. Even if you are. Be brave in your discomfort. Take, for example, APG's equal pay for men and women. Even though that’s just a tip of the iceberg, it’s a good example for other companies.”
When you look at the initiative that companies are putting on their D&I agenda, is there anything missing?
“Whatever means you use as a company to stimulate inclusion, people have to feel it. The DNA of a company must be tangible in the walls and the carpet. Formulate a clear vision with diversity and inclusion as one of the pillars and build towards it, in collaboration with the employees. That’s where your success lies. My fellow speaker and corporate anthropologist Jitske Kramer puts it very aptly: ‘Inclusion is inviting someone to the party and letting them dance. But inclusion is also letting that person help decide on the playlist.” Don't impose this on employees from above; give them the space to speak up. Then everyone feels responsible and you really form a culture together.”
Is it possible to pay too much attention to the theme?
“This is about a culture change and it starts with that one thought change. For that you use words; they have power. But the fact is that everyone connects in different ways, at different times. You can hear something five times and only actually absorb it on the sixth. Because someone is using the words that mean something to you at that moment. So it’s good to keep talking to each other.”
Some issues around inclusion are very clear and visible. Like age, gender and physical disability. But there are also non-visible issues. Which ones should we be sure to discuss?
“There will always be blind spots and we need to explore them together. Systemic racism is a recent example. That term, alongside discrimination and racism, is popping up more and more in discussions. And it shows that racism is not just the personal beliefs of individuals. It is now reflected in society and organizations, creating or perpetuating unequal opportunities and outcomes for certain groups.”
I felt really angry and distraught after George Floyd’s death, it was closer than I had thought.
Looking at diversity and inclusion, the Netherlands is improving. At the same time, the debate seems to be hardening. Are we conducting the discussion in the right way?
“The way the discussion is being conducted makes me very sad. There is no vaccine to solve this problem immediately. It takes time and change doesn’t come without a struggle. I felt really angry and distraught after George Floyd’s death, it was closer than I had thought. I hope we can continue to see that this is part of a larger movement. We need perspective, the power of imagination, to see that change for the better takes time.”
Despite that negative feeling, you are brimming with energy when you talk about the topic. Where do you get that strength from?
“From my love for humanity. I look for the good in someone, even when you talk about polarization. Hate is confused admiration, we don’t want to hate, we all struggle with our own questions and personal crises. I know this about myself too, nothing human is foreign to me. So I am one of the Rutger Bregmans of this world, I think all people are good. There’s only the occasional person that actually has bad intentions.”
When you talk about inclusion, you are talking about being equal and being of equal value. What is the difference?
“People are not all equal, or the same. We are all different, in color and gender, but equal as human beings. That diversity is beautiful and we should embrace it. So look at my color, because I am enormously proud of it. But first of all look at me as a human being. When I was a boy in ‘t Harde and I wasn't allowed to enter that evening, people thought and saw all sorts of things, but not who I really was.”
Do you suffer from unconscious biases yourself?
“I didn’t think so, until recently. My sister, who works for me, mentioned that a party we work with did not look at her during meetings. I hadn’t noticed and I couldn’t imagine it. So I didn’t do anything about it. Later, when I saw it myself, I was shocked. I felt guilty for not standing up for her. I could only say “I didn't see it”, just like Johan Derksen did when it was about gay violence, and it’s just not okay. But this was my blind spot. I have now resolved to take every signal seriously, any time someone comes to me to report something. Even if I don’t see it right away myself.”
You want to be part of the movement forward with your workplace inspiration sessions. Why?
“So that we can let everyone be the best version of themselves. Don’t let prejudices outweigh someone’s character. With the best versions of each other, we can work on the best version of a company and of society. And we can do that if we see each other as equals. Celebrate the differences.”
The pension system is undergoing a major overhaul. This means that both employees and pensioners will soon be faced with a lot of questions. That is why pension funds and pension administrators like APG need to adopt a more coaching role. That is what APG CEO Gerard van Olphen said at the Pensioen Pro Annual Conference, a platform for knowledge- sharing in the pension sector.
With the arrival of the new pension system, things are going to change for employees and pensioners. Their pension contributions will still be invested, but the amount of their pension will no longer be fixed because it will fluctuate with both the pension contributions invested and the investment results achieved. And that will also become much clearer: as a member you will soon have your own pension account into which your pension premium will be paid. You will save for yourself, see the fluctuations in your own pension pot and thus become more aware of the risks.
Will I be able to maintain the same lifestyle I have now?
All these changes will undoubtedly raise questions among both employees and pensioners, Van Olphen said: “That’s why companies in the pension sector need to look very closely from the perspective of those members. Much more than they are doing now. They will need to respond to a variety of wishes and questions. For example, people expect us not only to invest their money well, but also to explain and account for it in very understandable language. And people also want to know how much net retirement income they can count on now and in the future.” Not in a complicated way: split into OAP, employer’s pension and their own income from investments, for example, but simply the total. You want to get an idea of whether you can continue to live in the same neighborhood later on, whether you’ll still be able to go on vacation with your family, like you’re doing now. Pension funds should be more aware that it’s all about people’s financial fitness. Whether they will be able to maintain the same lifestyle they have now."
Employees’ and retirees’ right to care
These questions become even more relevant when people are confronted with moments of great joy or great sadness, e.g. moving in together, having children, divorce or the death of a loved one. Van Olphen: “That’s exactly when people are left with many questions, including about the consequences for their pension. Sometimes they can turn to their employer or trade union, but for pension companies such as APG, I believe there is also a clear task. And it’s better if we don’t wait for people to approach us with their questions; rather, we can approach them proactively if something has changed for them that affects their income or pension. Employees and pensioners are entitled to our care.” He feels that although pension funds do not have a duty of care, their members do have a “right to care”.
Better grip on money matters
Pension funds and pension administrators will have their hands full with the transition to the new pension system in the coming years. It is complicated, new regulations have to be put in place, IT systems are being overhauled, and so on. With the possible risk that this leaves too little attention for their members, Van Olphen warned. “I think pension companies like APG should strive to ensure that the new pension will soon be easy for every member to understand. Transparent, and easy to understand. That also means that we need to act more like a coach. There will be a real need for that.” This role of coach in and of itself is not new to APG: one of the pillars of APG’s strategy is to be an “experienced guide” who helps employees and pensioners with their financial future; sometimes directly, sometimes via the pension funds that are clients. Providing them with customized advice on all their financial affairs. An example of this is the APG platform Kandoor (link: www.kandoor.nl), where APG answers more than fifty thousand financial questions a month. Not only about pensions, but also about matters such as rent allowance, severance plans, taxes, OAP, debt assistance, etc.
Still on the right track financially?
Van Olphen emphasizes that the role of coach he is envisioning is different from that of financial advisor: “We already have enough financial institutions that you can turn to for advice and various financial products. We should not aspire to that role. But we can help participants if they are unsure about something, if they want a quick check to see whether something is right or wrong. Whether or not they are still on track financially.” He thinks it’s right that people make high demands on their pension fund: “As a pension sector, we may think that we have the best pension system in the world in the Netherlands, but that’s really not how employees and pensioners see it. They are now being given a new pension system in which they are given more responsibility and run more risk. Not everyone is excited about that. People want to understand what will happen to their pension, they want to feel safe with their fund. It’s up to us to appropriately respond to that with integrity, regarding the new pension contract.”
BpfBOUW has won the silver Pension Pro Award for Best large pension fund. BPF Schoonmaak won the Pension Pro Award Diversity & Inclusion.
BpfBOUW won this high award in the pension sector because it was the only one of the major pension funds to be able to increase their pensions in 2020 - for the third time in a row. The professional jury praised BpfBOUW for its good strategy in difficult times - "the highest funding ratio of the large funds, a real long-term investor". Furthermore, the jury report praised the great attention to sustainability and “the eye for human capital of the participants”.
Award for BPF Schoonmaak
BPF Schoonmaak received the prize for Diversity and Inclusion for its courage to raise the importance of diversity and ethnicity. The pension fund says about this on its own website: "Wherever you come from and whether you are male or female, old or young: everyone deserves a place". BPF Schoonmaak not only propagates this conviction: they also show it convincingly in the composition of their board.
Best Communication Initiative
Finally, the Pension Checker emerged as the best communication initiative. The Pension Checker is a mobile app that allows participants to quickly find out how much net pension they can expect. The tool is the product of a collaboration between different pension funds, led by the Pension Federation. The ABP / APG Experiments Team developed the prototype. The jury praised the fact that several parties from the pension sector have worked on this. The Pension Checker previously also won the Pensioen Wegwijzer Award 2020.
The prizes were awarded online to the winners on Thursday evening, December 10, after the Pension Pro Annual Congress. Readers and listeners of Pension Pro, the Financieele Dagblad and radio station BNR could vote for the public award.
Why so many soccer pros go broke at the end of their career
Top soccer players earn millions, but the money often drains out in no time. They live in a make-believe world with private jets, designer clothes and extravagant indulgences. When their career is over, more than 60 percent of the European soccer players go bankrupt.
Soufyan Daafi created the company Sport Legacy and Kenneth Vermeer became their ambassador. Their goal: to create awareness. “They think about their financial future much too late.”
Luxury vacations on tropical beaches. The most expensive cars. VIP tickets to the most eccentric parties. Extravagant watches and a harem of “gold diggers”. If you follow the top soccer players on Instagram you will see a world of unlimited extravagant indulgences. A world where money is spent by the ton. But the reality behind it is really tough. The road from millionaire status to bankruptcy is shorter than the fans realize.
Help where possible
Former international player Kenneth Vermeer, also former goalie of Ajax and Feyenoord, plays in sunny California these days, for Los Angeles FC. He is concerned about former soccer stars who fall into a miles-deep, black hole at the end of their careers. His former teammate and friend from his younger days at Ajax, Soufyan Daafi, started the company Sport Legacy and Kenneth Vermeer joined him as an ambassador for the company. Sport Legacy’s vision is to help where possible in a bizarre soccer world where nothing is what it seems.
Soufyan Daafi: “Not everyone gets to have a career with an income of millions. I saw it all around me. One of my best friends, Kenneth Vermeer, was a champion with Ajax for three years. At one point he was benched, and it was not certain if his contract would be renewed. There was no interest from foreign clubs. That was when I realized how big the risks are when that soccer income disappears. Kenneth was fortunate and got signed on with Feyenoord.”
In a world where a 17-year old youth can become a millionaire in one day, you might wonder what big clubs like Ajax and PSV are doing to keep their talents on tracks
“The club always recommends for everyone to speak to a financial advisor. Sportdesk ABN Amro, for example is active with Ajax. For AZ it is the Rabobank. But that help only goes so far. When serious financial problems occur, all the parties end up point the finger at each other. The club will say: ‘That’s what the agents are for.’ The agent will say: ‘We assist the player, but he is responsible for himself.’ And the player looks at both parties: ‘I need your support.’ And that is what we want to do now, with Sport Legacy. Making players aware that they should not fall into all kinds of financial traps but should ask for help before any of that happens.”
Most soccer players have a spending patterns of between 5000 to 30,000 Euros a month
“We keep in touch with agents, the clubs and the players to prevent problems. 62 Percent of the players go bankrupt when their career is over. We want to drastically decrease that number. In America, those percentages are even higher; in the NFL, it is as high as 80 percent. It’s easy to explain. When you’re making millions, it feels like it will continue forever. Most soccer players have a spending pattern of between 5000 to 30,000 Euros a month, or more. When you’re used to a certain amount coming in every month and then it suddenly stops and you only have a million or two in your bank account, you’ll be bankrupt in as little as five years.”
Especially in videos and photos on Instagram, soccer stars are increasingly exposing their sometimes exotic lives. A weekend on Ibiza with the private jet, a road trip with the latest Bentley. And in between, going to the most exclusive parties, dressed in expensive designer clothes and dripping with jewelry, where the jetsetters are served the most expensive champagne.
Soufyan Daafi: “Players think it’s the norm, but it is a make-believe world. I’m currently having conversations with guys that have nearly a million followers on Instagram but are in big trouble financially or feeling depressed. I’m not saying don’t use Instagram, but what do you use it for? As a platform for your own branding, which is fine, or to show off your life of luxury to the world?”
Do players around age thirty think about their financial future?
Soufyan Daafi: “Yes, they do, but often much too late, unfortunately. They accrue a CFK pension fund. The purpose of this is to offer a player/runner a financial base after his professional sports career, so that he can focus (better) on his new career. We are also talking to those players. The CFK sees soccer players as a nice asset, but also a liability, because they can’t touch their money. I talk to soccer players whose careers are already over and have made arrangements with the CFK to get paid in the coming twenty or thirty years, but they’re thinking, ‘I need it now’. For example, to develop a real estate portfolio. The CFK program doesn’t allow for that.”
But there are positive examples too. For instance, international player Ryan Babel. The former Ajax player decided to delve into money matters and he ended up becoming a real estate entrepreneur. He has been thinking about his soccer retirement for years. “I want to at least maintain my current lifestyle. I don’t want that to decline,” Babel says. He is buying houses and apartments all over the world. At the recommendation of his agent, he purchased a new apartment every quarter. Babel is now working closely with Sport Legacy.
Soufyan Daafi: “Wat Ryan is doing right is that he realized early on: ‘I want to keep my current lifestyle. I want my kids to keep going to private schools, I want to have nice vacations, I want to be able to keep visiting those beautiful places I go to now.’ He realized he would need a big income for that. And that in the Netherlands there is virtually no job that will pay as much as his soccer salary. So, he figured out what his options were. He went into real estate with this goal: After my soccer career is over, I still want exactly the same monthly income I have now. I admire Ryan, because he also wants to share what he has been learning with the younger players. He tells them: ’When you get your first contract, don’t buy a Bentley; do something useful with the money.’ I’m learning a lot from him.”
Kenneth Vermeer and Soufyan Daafi
Are these problems common in the Netherlands?
“It’s not substantiated with numbers, but I have a sense that it is. When you look at how many talents there are in the Netherlands. Even just looking at the Dutch team, all those debutants. I know players who played for top clubs in the Netherlands, Spain, England and Italy, and they are currently facing serious financial challenges.”
What exactly can you do for these players?
“As Sport Legacy, we approach players with simple presentations. At the kindergarten level. ‘Peter, you’re signing your first contract. What kind of car do you want to drive?’ They often pick a car that’s worth a ton (100,000). Then we ask: ‘Are you going to pay for that car out of your signing fee, with your savings or with your salary?’ And then we want them to see that if they bought an apartment for two tons and rented it out, that renter will be paying for their car. The difference is that the ton spent on that apartment will be appreciating in value, whereas the ton spent on the car is always depreciating. That is the kind of awareness we want to create. And as soon as we do, the player realizes: that is true; it can be done differently. I can get that luxury item without spending my own money.
We are also quite confrontational. ‘If your salary were to stop today, what are your expenses? How much income do you generate right now, besides your career?’ And then we calculate how long it would take for that player to be bankrupt. I know a player in Feyenoord who doesn’t have to worry. If his salary stopped today, he’d be doing fine, financially, for another 86 years. But I also have players that are finished after three years and then we look at: ‘What other passion do you have besides soccer?’ Then you get to hear all kinds of interesting ideas. Opening a ski school or a personal gym. Together with those players we then look at how we can get that set up.”
What are you most proud of so far?
“That we have been able to get the attention of the soccer world in a relatively short time. I can’t say our name is fully established yet, but our presence is increasingly being embraced.”
The Dutch pension system is again rated the best this year in the Mercer Index. Why is that and how is pension arranged in other countries? We asked two experts.
We like to complain about it, but with relatively little reason: the Dutch pension system is the best in the world. In the Mercer Global Pension Index, that compares all pension systems in the world on several crucial points, ‘we’ are rated at the top position, just like last year. “No other country scores this good on all of those points as we do”, says Rob Bauer, professor Institutional Investors at the University of Maastricht. The index assesses the adequacy, durability and integrity of a pension scheme. Are the payouts sufficient for the participants? Is it affordable in the long term? And how honest and transparent is the system?
The Netherlands scores quite alright on all of these three points, also says Onno Steenbeek who is responsible for strategic portfolio advice at APG and works as a professor in risk management of pension funds at the Erasmus University. “The entire world is jealous of the Netherlands”, he says. “What makes us unique within Europe is the fact that we have saved a lot of money labelled pension.”
That’s something the people in a country such as the United States can only dream about. With a ranking at the 16th position on the international list, the US is not scoring very well. The paternalistic model of the Netherlands, in which it is mandatory for us all to save for our pension once we are employed somewhere, is just unthinkable in the US, says Bauer. Annuity, having your pension paid periodically, is in many cases a choice over there instead of an obligation, like it is in the Netherlands. That is to say, if you receive pension at all. “There has been an enormous trend in the US from collective to individual systems, or even no pension system at all. The public pension funds that still exist, are of states and cities. Some cities have already gone bankrupt.”
One of the related causes is the weak legislation, says Bauer. “There are guidelines in place, but the funds have a lot more freedom to do whatever they want. That’s a big problem. They are allowed to take too much risk which means they can achieve high yields, but also suffer major losses.”
Moreover, the funds in the US work with a much more optimistic calculation of the coverage ratio, but even with that calculation method it is way worse than in the Netherlands. Bauer: “The largest pension fund of America has a coverage ratio of approximately 70 percent. But if they would calculate the coverage ratio according to the Dutch legislation, it would only be 30 percent.”
Bauer believes that Americans find us too strict in the Netherlands. “You could say that we act as if the world is ending, while they act as if nothing is going on.”
UK and Denmark
The United Kingdom, ranked at the 14th position, is not performing much better than the US. The UK has also made a move from collective to individual, says Bauer. About five years ago, pensioners there were given the freedom to withdraw their pension after the age of 55 in one go, instead of having it paid every month for the rest of their lives. Bauer is horrified by this ‘Lamborghini pension’. “We have arranged that a lot better with our mandatory annuity. It is the smartest choice economically speaking.”
In terms of the system, the English scheme is closest to the one in the Netherlands, according to Steenbeek. People save money through their employer and the employer also contributes. “However, a large part of the population is not covered by a pension scheme.” Where 90 percent of the employed people in the Netherlands is affiliated to a pension fund, that percentage in the UK, but also in countries such as the US and Canada, is only about 40 percent. Another fact is that the English only put 8 percent of their income aside (the employer pays half), while that’s approximately 20 percent in the Netherlands.
Denmark has a high score internationally speaking, with a second position on the ranking. They mainly owe that position, according to Steenbeek, to the fact that they have a state pension in place, the same as our AOW, a well-organized and financed collective basic pension for every resident. Besides that, most of them have a supplementary pension, linked to income and assets.”
The problems we see in the Netherlands, are also observed in other countries. Ageing is a problem almost everywhere, as is the low interest rate.
There are many countries that could use a thorough reform of the pension system, but it’s political suicide to bring that up, says Steenbeek. “That’s happening in France, for instance. They are doing really well over there at the moment in terms of adequacy. The pension is generous, but not durable. This system is based almost entirely on turnaround and due to the increasing ageing, less and less employed people are paying for more and more pensioners. But as soon as you start fiddling with the system and suggest that people have to retire later because it is no longer affordable, people are hitting the streets and the entire country comes to a standstill. Implementing such reform is actually only successful in times of a crisis.”
Bauer is ‘cautiously positive’ about our new pension agreement. He doesn’t expect it to jeopardize our number 1 position, but he has still to see how it will look like in practice. “The generation discussion has not ended yet with the new agreement. And will we now all of a sudden abide by all the rules we came up with to reduce the pensions if needed? If everyone – including politics – sticks to the agreements made, it is a progression.
Steenbeek also doesn’t anticipate that the new system causes us to lose points. “The problems we see in the Netherlands, are also observed in other countries. Ageing is a problem almost everywhere, as is the low interest rate. The pension paid to the current pensioners, is probably less feasible for future generations. It is no longer as evident as it used to be, but we will continue to score well on durability. The adequacy may lapse a little, but we are in quite a generous position compared to many other countries. And we will score better on clarity because the new system is much more transparent.”
The fact that we score so well right now, doesn’t mean we can rest on our laurels, Steenbeek emphasizes. “The system, in the way we came up with it, is actually not resistant to the world of today, with low interest rates, lower expected returns, an increasing amount of people who are not accruing any pension at all, and a business community unwilling or unable to pay very high premiums. We are unable to live up to the generous promises we made. We have saved an enormous amount of money, but something has to happen in order for us to continue our ranking in first position.”
How are other European countries doing?
We’ve already mentioned Denmark, France and the United Kingdom. But how is pension arranged in other European countries? The website consultancy.nl clearly maps this out.
- Germany - # 11 on the Global Pension Index
They also have three pillars beyond our eastern border. Although the first pillar - compulsory for all workers - makes up about 80 percent of all pensions in the country. Germany has been working with a points system since 2002. Every worked year earns points, which are eventually converted into pension. The more points you earn, the higher the payout. Legal retirement age? 67 years.
- Belgium - # 16 on the Global Pension Index
Just like us, our Belgian neighbors have three pension pillars: a "retirement pension" for everyone who works, an "extra-legal" pension that you collectively build up with your employer and a private savings plan. At the time of publication of the article on consultancy.nl (2017), that retirement pension amounted to an average of about 60 percent of the average earned wages and is based on pay-as-you-go: contribution payers therefore directly finance the pension benefits of pensioners. The legal retirement age is now 65 years, but will rise to 67 by 2030.
- Spain - # 22 on the Global Pension Index
Main pension scheme in Spain is a compulsory government pension. It is striking that low and middle incomes receive a fairly high percentage of their earned wages as pension: no less than 90 percent in 2017. Here, too, the pay-as-you-go principle applies: workers use their contributions to finance the pension of the elderly. Legal retirement age in Spain is 65 years, but will rise to 67 by 2031.
Four major pension providers, APG, Blue Sky Group, Nationale-Nederlanden and PGGM, are today launching Mijnwaardeoverdracht.nl. The new website is the result of a unique collaboration between platform developer Hyfen and the implementers. The joint initiative optimizes value transfers using innovative decentralized technology. Already about fifty percent of the participants can use the platform. In the near future, more pension providers will join the platform, which will further increase its reach.
A value transfer is the transfer of an accrued pension pot from a previous job to the pension pot of a new job. Until now, arranging a value transfer has been complicated and time consuming. With Mijnwaardeoverdracht.nl, this will change. The site connects the administrations of parties in the pension sector with decentralized technology. In this way, all the information is available at once to compare the various options and to transfer the pension.
The platform is one of the first blockchain-based applications available to the general public. The participating parties jointly designed the platform. Because all parties exchange the necessary information in realtime, they reduce the turnaround time of a value transfer from nine months to approximately thirty minutes. In a clear step-by-step plan, the pension saver compares the current and old pension scheme and can thus make a well-considered choice. The decentralized set-up also safeguards the privacy of users of the platform. This has been determined by independent auditors.
Hidde Terpoorten, manager of Hyfen: “We are proud that with this collaboration we are showing that you can speed up and simplify a process for the pension saver, while achieving efficiency at the back end. The success of this collaboration is inspiring: together we can do more for the pension saver.” We are investigating where this philosophy can be put to further use. For example, one of the following developments is proof of being alive (attestation de vita), which requires pensioners abroad to make an expensive and sometimes dangerous annual trip to an embassy. A digital app then makes it possible to provide this proof once. This can then be shared with the required parties, instead of the participant going through the currently lengthy process with each party separately.
Francine van Dierendonck, member of the APG Board of Directors: “Mijnwaardeoverdracht.nl is a fine example of innovative services. Participants of already affiliated pension funds can quickly and easily arrange their value transfer using a smartphone or a tablet. I am proud that Hyfen, as a spin-off of APG, has succeeded in establishing this unique collaboration within the pension sector.”
Luuk van Tol, Manager of Pensioenservice Blue Sky Group: “It’s great that we got to participate in an award-winning project. It is a win/win situation for both us and for the participant.”
Laure van Waardenburg: IT Manager at Nationale-Nederlanden:”This initiative has enabled us to create an innovation in a unique way, with other pension providers, in which we can support participants in making the right choices for a financially secure future as easily as possible. We are proud to be the first insurer to contribute to this.”
Alexandra Philippi, Chief Operations Officer at PGGM: “PGGM wants to make it as easy as possible for the participants of our clients to arrange their pensions. Including for making the transition to another pension fund. Mijnwaardeoverdracht.nl is a very useful and innovative platform for this, which we were happy to help develop. Pensioenfonds Zorg & Welzijn is the first of our clients on the platform and we hope that other funds will follow, so that even more people can benefit from it.”
As of today, anyone can use Mijnwaardeoverdracht.nl by logging in with DigiD. Half of the participants who are accruing pensions can already find his or her pension provider on the platform. In the near future, more pension providers will join the initiative, which means that more and more participants will be able to use the platform for their value transfer. Pension provider AZL is the next pension provider to join. The platform should soon be the preferred place to handle value transfers.
Hyfen is a spin-off of APG, which was positioned independently earlier this year:
APG has invested $50 million in a sustainable bond that addresses income and social inequality in America’s Black and Hispanic communities. The proceeds of this bond - issued by Bank of America - will mainly be used to finance projects for affordable housing and socio-economic advancement.
The ‘Equality Progress Sustainability Bond’ is unique in that it explicitly targets social and economic disparities in underserved minority communities, says Joshua Linder, Credit Analyst Fixed Income at APG Asset Management. “America’s Black and Hispanic communities have been especially hard hit by the Covid-19 crisis. As a result, these disparities have widened. We find the use-of-proceeds impactful as it addresses a number of specific and clearly identified inequalities.”
One such disparity is home ownership, which is widely considered important to social stability and the accumulation of wealth. Research indicates that only 47% of Black families and 51% of Hispanic families own their homes, compared to 76% of White families. Home buyers in these communities also tend to get less favorable mortgage provisions. The proceeds of the bond will be used, among other things, to expand mortgage lending for single or multi-family housing.
Other uses of the $2 billion proceeds include loans and investments in affordable housing, financing for medical professionals to expand medical services in areas with large Black and/or Hispanic populations, and investments in Black and Hispanic owned or operated businesses. As a sustainable bond, the investment finances a mix of social and green projects, including renewable energy and clean transportation projects.
Leading green bond investor
“This was a good investment opportunity because we find Bank of America attractive from a credit perspective and have been engaging with them for a long time on green, social and sustainable bond issuance,” says Joshua. The sustainable bond has outperformed both comparable Bank of America bonds and its peer group since it was issued.
Sustainable bonds are issued by companies and (semi-)government agencies for the funding of a mix of green and social projects. APG is one of the world’s largest investors in green, social and sustainable (mixed) bonds; at the end of 2019, we had invested € 9 billion in such bonds on behalf of our pension fund clients ABP, bpfBOUW, SPW and PPF APG. To encourage development of this market, APG has published the Guidelines for Green, Social and Sustainable Bonds, which outline our expectations for companies, institutions and governments issuing such bonds.
After two years of research and preparation, the time has come: SPW, the pension fund for housing corporations is making six hard promises to its participants and employers today. It is a significant step for the pension sector. “SPW is really going out on a limb with these pension promises,” says APG executive board member Francine van Dierendonck.
Birte van Ouwerkerk and Jim Schuyt are the driving force behind the pension promises. Birte is responsible for the development and implementation of the pension promises as the Marketing communication strategist. Jim has been the chairman on behalf of the employers and the pension promises from day one.
Why are you making these promises to participants and employers?
Jim: “Promises are often made by commercial parties to get clients to commit to them. For example, Jumbo, where you can get your groceries for free if there are four people in line. We, as a pension fund, don’t feel that pressure. Because it is mandatory, participants can’t just switch to a different fund. That fact makes us see this as an extra responsibility. Even without being required to, participants should choose us; that is our approach. With the pension promises, we are therefore making the topic of pension and SPW’s services tangible and we are showing what the fund stands for.”
Do participants and employers really need such promises?
Birte: “Yes, we think so. These promises are based on extensive research among participants and employers. How are they seeing our services and the subject of pension in general? Although SPW scored positively on that first point, we also detected a lot of questions and uncertainties: will there be enough left for me and what can I expect from my pension fund? You can explain to them that those worries are largely unfounded. You can also put it in stronger terms by promising that the participants’ investments are in good hands.”
Making promises. But, with the new pension contract, isn’t that exactly what we are trying to get away from?
Jim: “With these six promises we are not going to do something completely new, or promise things we have never done before. The promises that participants and employers have chosen are showing things that we were already doing on a daily basis, but that they didn’t necessarily know much about. So, we are responding to questions that our participants and employers already had. These questions will not be that different when the new pension contract kicks in down the road.”
What was APG’s role?
Birte: “25 of our people were involved in the creation of the promises. From people working at the Client Contact Center (KCC) to the Employers’ services and Pension administration departments. These promises are also very valuable to APG, because they give APG employees more clarity about what is expected from them and provides a focus in the service.”
How will you make sure that these promises are really going to settle in the DNA of SPW?
Birte: “We are going to go live in controlled phases and will take a year and a half to fully integrate the promises into our services and communication. We will stay in touch with participants, employers and APG employees to see how it goes. We are now starting on the external branding campaign to inform employers and participants, with the objective of creating awareness during this phase.”
SPW’s six promises
1 Guaranteed income for the rest of your life, for you and your partner.
A guaranteed income for the rest of your life, but also for your partner and your kids if you die. Ensure income in case of disability.
2 Your investment is in good hands, with proven returns.
SPW achieved an average investment return of 7 percent for the past twenty years. Investments are transparent, responsible and socially conscious.
3 Room for you to choose what you want to do with your pension.
You choose when you want to retire, partially or completely. First a bigger amount and later a smaller amount. Partner’s pension or no partner’s pension.
4 Personal pension check, to use when you want to.
Online, by phone on chat. Use it when you want to. Because you want to know if you’re on the right track. Or because something changed in your life. Or because you want to apply for your pension.
5 Complete overview and insight into your future income.
Always and everywhere clear overview & insight at Mijn SPW (My SPW). All expenditures and income in a row. So that you know what you are doing now and how much money you need. And you can see what you want in the future and how much of a pension you will need at that time. You can choose and calculate for yourself in Helder Overzicht & Inzicht (Clear Overview & Insight), the calculation tool in Mijn SPW.
6 Pension plan for all of us, customized for housing corporations.
Developed in collaboration with all relevant representatives of employers and employees in the sector.
Today, the government is presenting the annual budget. Will the position of working and retired people in the Netherlands improve in 2021? Six questions about Prinsjesdag and pensions.
1. The government is talking about a 3.5 percent growth of the economy and a 1.2 percent increase of purchasing power for employed people and 0.4 percent increase for retirees. That sounds – moderately – positive. But how certain are those predictions?
It is a fact that the government is lowering taxes by 1 billion Euros to improve the purchasing power of Dutch citizens. Despite the fact that there is no indexing in 2021 for most retirees, on average their positions will improve slightly (by 0.4 percent). Employees who are keeping their current job in 2021 will also slightly improve on average (by 1.2 percent). This means that many employed people and retirees will have a little more money to spend next year.
At the same time, this requires some comments. In short: purchasing power pictures don’t mean that much, particularly right now. The purchasing power pictures are determined by the development of wages, inflation and government measures. The latter is the only thing the government can fully control. And now that the uncertainties around the development of the economy and the employment market are even bigger due to COVID-19, the predictions mean even less this year than they did in other years.
It is expected, however, that more employees will lose their jobs in 2021. They will be spending less, not more. This figure is not included in the purchasing power pictures. In addition, municipal charges, such as the real estate tax and parking rates may go up, because many municipalities are having financial problems. This has also not (yet) been incorporated into the purchasing power pictures but may have a big impact.
2. We are also hearing about a shrinking economy due to corona, higher premiums and price increases. How will that affect working people and retirees next year, in practical terms?
The purchasing power pictures always take into consideration higher wages, lower taxes, higher prices and slightly higher care premiums. If you add up all the plusses and minuses, most people will be slightly better off. But that is very uncertain. The local municipal taxes could rise (significantly).
3. What role does corona – and a possible second wave – play in this story and in the forecast of pensions in 2021?
If there is a second lockdown in the Netherlands, the Dutch economy will develop less favorably than predicted. That would postpone the economic recovery for some time. For the pensions in 2021, the coverage ratio of the end of December of 2020 will be key. Corona may have an impact on that, but faith in the financial markets is determined by several factors. For example, we saw very high share prices in August of 2020 despite the great uncertainty around corona in, for example, the US, Brazil and India.
4. Today, we also found out that some funds are still below the 90 percent coverage ratio. What could that mean for pensions in 2021? What scenarios are possible?
For pensions in 2021, the coverage ratio of the end of December of 2020 is determining. If the coverage ratio is still below 90 percent at that time, in many cases there will need to be a decrease of pensions. The funds will then still be able to opt for spreading this decrease over time. A decrease in pensions is not included in the purchasing power pictures.
5. Last week, a survey showed that the life expectancy of the Dutch person has been adjusted downwards. Will this have consequences for pensions?
The Actuarial Society has indeed lowered the average life expectancy. This is related primarily to a refining of the model used. The life expectancy has not suddenly declined. According to the Society, a 65-year-old now has half a year less than was expected previously. For a man, the life expectancy at age 65, for example, has changed from 20 ½ years to 20 years. Because pension payments will then have to be paid out for an average of half a year less, the coverage ratio rises by an average of 2 percent. It is important to mention here that the exact figures are different for each fund. The figures do not yet take the corona crisis into account.
6. But do the funds play a role in the recovery of the ailing economy resulting from corona?
Prinsjesdag this year is primarily about how we, as the Netherlands, can come out of the COVID-19 crisis in terms of investments. The government pre-empted this with a recent presentation by the Nationaal Groeifonds (National Growth Fund), which should boost public investment in the coming years. The Dutch pension sector understands and supports this movement towards active economic investment policy by the government. The Dutch pension sector would also like to increase its social role as pension investor in the Netherlands and elsewhere. For example, by pulling the Netherlands out of the crisis, in an accelerated and more sustainable way, based on public-private cooperation with the government
See link for a position paper by the Pension Federation, leading up to Prinsjesdag.
The Wellington Block is located just a two-minute walk from Covent Garden, in the well-known theater and entertainment West End area of London. APG is investing in the redevelopment of this special site in joint venture with London Central Portfolio (LCP). Purchase price 84.4 million Euros.
- The Portfolio Club (“TPC”), a joint venture between APG and LCP, purchased the attractive hotel property in the heart of London from the British real estate company Capco. In total, TPC is purchasing six buildings that are connected to each other and together form the Wellington Block.
- Planning approval has recently been obtained for the Wellington Block to be redeveloped and expanded into a hotel with at least 146 rooms and a shopping and restaurant section. It is expected that the hotel will open its door to its first guests in 2023.
In addition to the unique location, the hotel will also differ from other hotels in other ways, according to Foortse. “With this hotel concept, we are focusing on a wide public at this location: from tourist to business travelers and from a one-night stay to several weeks or even months. The rooms also have their own cooking area, in addition to the usual facilities.”
By focusing on several target groups, the hotel will be less sensitive to big fluctuations in, for example, the number of tourists or business travelers. Foortse: “Particularly in these uncertain times, these kinds of formulas have proven their relative strength.”
Naomi Heaton, Chief Executive of TPC also believes in the formula. With the combination of beautiful architecture and a top location, she believes a broad target group is being addressed; from national to international.
In addition to the Wellington Block, TPC also has a second hotel site at another sought-after location in Central London. At the end of 2019, the APG and LCP joint venture purchased Harrington Hall in South Kensington. The 237 rooms at Harrington Hall are currently being renovated according to the same concept as Wellington Block. The expected reopening of Harrington Hall is at the end of 2021. Foortse: “We hope to expand our portfolio in London even further in the coming period.”
APG partners with Nationale DenkTank 2020
How do we enhance well-being and prosperity and increase the control for middle groups, in cities and regions, now and in the future? This research question, shortly formulated as ‘A better perspective for middle groups in the Netherlands’ kicked off the fifteenth edition of the Nationale DenkTank 2020 today. Twenty selected and talented academics delve into this topical issue the next four months and will present their solutions by the end of the year. APG is proud to join the Nationale DenkTank 2020 as a theme partner, together with the Ministry of Social Affairs and Employment, the Rabobank and the municipality of Amsterdam.
The pressure is high
If anything was revealed by the corona crisis, it is the vulnerability of our middle groups. Living in the proximity of work, having a grip on your own financial situation and a good perspective on the employment market appears to be unfeasible for many Dutch. The Nationale DenkTank 2020 is therefore focusing on four tangible and topical issues:
- Grip on finances, now and in the future: Saving money is not sexy. How do we ensure financial skills and grip and control on finances for the middle groups?
- Living and living environment: How do we arrange for sufficient affordable housing and a higher sense of broad well-being in the living environment?
- Chances on the employment market: How do we make sure that our teachers, window washers and police officers are resilient and agile on the future employment market?
- Schemes: What are the expectations of middle groups towards our schemes and how can we close the gap between expectations and impacts?
According to Gerard van Olphen, chairman of the Board of Directors of APG, this year’s theme seamlessly aligns with everything APG stands for. “Providing support to middle groups is ultimately at the core of our existence. Think about all of those teachers, nurses, police officers, construction workers and many others who are counting on us for their financial future. That means it is only logical for APG to recognize the fact that these groups are under pressure.”
The more tangible, the better
Apart from financial support to the NDT’20, APG also provides the knowledge and expertise of several colleagues in order to challenge the participants in the think-tank and to stimulate them to come up with creative solutions. How can we, for example, support middle groups in thinking about their financial future in a timely manner and in giving them more control?
Van Olphen: “The more tangible the possible solutions, the better. A plea to politics to make certain decisions is great, but we are hoping for actions APG and, better still, the pension industry as a whole, is able to take proactively. It’s about us being able to implement the results as pension industry and society. A strong position of middle groups contributes to the Netherlands being more prosperous, which is in the interest of all of us.”
What is the Nationale Denk Tank?
Foundation the Nationale DenkTank organizes a Nationale Denk Tank (NDT) every year with twenty young academics from different educational backgrounds to tackle a social problem. The NDT was established in 2005. The central issue during the NDT 2019 was “How do we realize a digital society that is healthy, resilient, honest and inclusive?”.
In the 2020 AGM (Annual General Meeting of Shareholders) season, APG and other investors voted out remuneration proposals at four Dutch listed companies. This demonstrates that socially responsible investors such as APG are taking advantage of their increased influence on executive pay at listed companies.
APG - on behalf of its pension fund clients ABP, bpfBOUW, SPW and PPF APG - voted against the new remuneration policy at Besi, Wolters Kluwer, Euronext and SBM Offshore. Overall, shareholders voted out executive pay proposals at five Dutch listed companies; APG is not invested in one of these, metallurgic company AMG.
Say on pay
Since December 2019, the remuneration policy of a Dutch listed company must have at least 75% of shareholder votes behind it. In addition, a company must explain in its remuneration report - in which a justification of executive salary and variable remuneration is provided - how they take ‘social acceptance’ into account. Shareholders have an advisory vote on the remuneration report, the so-called ‘say on pay’.
APG also did not support the remuneration policy at, among others, Van Lanschot Kempen, Basic-Fit and Signify (the former Philips lighting division). One particularly notable negative vote related to Ahold-Delhaize, the parent company of Albert Heijn. We think it was inappropriate for the company to have reduced the importance of sustainability in determining executive renumeration. In addition, Ahold-Delhaize applied only one sustainability measure - the share of healthy food in the sale of its own-brand food products - which furthermore is barely certifiable.
APG wants to see sustainability criteria incorporated into executive remuneration policies of listed companies. “But the criteria must be relevant, transparent and objectively measurable,” says Mirte Bronsdijk, corporate governance specialist at APG Asset Management. However, a large majority of Ahold-Delhaize’s shareholders supported the company’s proposal.
Over the whole developed market equity portfolio, there was a slight increase in the percentage of say-on-pay proposals that APG voted for, moving from 45% in 2019 to 53% in 2020. A large share of our negative votes relate to excessive CEO severance payments in the United States. In the US, severance payments of more than twice the salary plus bonus are fairly common. Compared with Europe and the UK (72%), the level of approval in the US is relatively low (37%).
More women at the top
Shareholders voted on nineteen directors’ appointments at Dutch listed companies; in seven cases a woman was appointed. Most new appointments to Supervisory Boards - which oversee management - went to women. Eumedion, a partnership of large Dutch investors that also includes APG, urges companies to achieve a better gender balance in top positions. Of the companies included in the Dutch stock market index AEX, only ABN AMRO currently does not meet the future statutory quota of one-third women on the Supervisory Board.
Follow This shareholder resolution
Oil and gas major Shell was the only Dutch company this AGM season where a shareholder resolution was put to the vote. APG abstained on a resolution filed by activist shareholder group Follow This, calling on the company to commit to binding climate targets for 2050. While we share the ambition for a climate-neutral economy by 2050, we do not want to continue arguing over long-term binding targets. As far as we are concerned, the focus at Shell (and other oil and gas companies) should be on implementing concrete measures to achieve its recently boosted climate ambitions.
APG supplements additional parental leave up to 100 percent
The time that partners had to resume work five days after the birth of their child is a thing of the past. As of July 1st, Dutch employees whose wife gave birth are allowed to take five weeks of additional leave. APG employee Martijn Klinkeberg: “I will absolutely take that leave and enjoy the little one as much as I can.”
This additional parental leave is a supplement to the current law WIEG, pursuant to which partners receive continued payment from the employer for five days following the birth. The total period leave now sums up to six weeks. The five additional weeks can only be taken after the usual parental leave of five days has passed and within six months following the birth. The UWV (Executive Institute for Employee’s Insurances) continues to pay 70 percent of the salary as per the new arrangement. APG offers its employees retention of monthly pay up to 100 percent.
HR manager Marjolein Kort explains the choice to supplement the benefits. “As an employer, we believe it is important for the awareness with respect to diversity and inclusion to be enhanced and to make tangible efforts. One of those tangible agreements is supplementing the parental leave. APG has already been supplementing the WAZO benefits for adoption and foster care leave up to 100% of the monthly income since January 1st, 2019.”
In order to reinforce this intention, APG signed the Charter Diversity in 2016 aimed at stimulating diversity and inclusion in the workplace for companies and organizations. In summary: “It is only possible to cooperate really well in an organization where people are appreciated for who they are. In a safe environment with the potential to be who you are, where your voice is heard, in which you are able to develop your own skills and can also encourage others to develop. The ambition of APG is for its workforce to reflect the participants’ population, our commissioning funds and society to a greater degree. And this is only the beginning of what we are intending to do in the field of diversity and inclusion.”
Martijn Klinkeberg, social media coordinator at APG, is expecting his second child in September. As a father, he is happy to be given the possibility to take additional leave. And as an employee, he really appreciates APG being the frontrunner to pay the additional parental leave up to 100 percent. “APG puts in a lot of efforts to be a Great Place to Work. APG has eliminated, for example, the pay gap between men and women. And the under-representation of women at the top also is a priority for APG.”
Martijn will make use of the additional parental leave. Even if APG would not supplement. “I will absolutely take that leave and enjoy the little one as much as I can. These early days are worth more than the lack of income it would entail.”
“Of course, what isn’t there, what you don’t see as a father, you don’t miss”, Martijn continues. “But we are meanwhile living in a time where things are no longer obvious. It is an outdated tradition that the woman takes care of the child and the man continues to work. So, it is really great to see that we are given more space as a man or a partner and that we are able to share and experience both the burden and the great moments together as parents.”
Martijn does not worry that others may consider him less ambitious. “I do not think my generation is really bothered with that. Your career is not depending on five weeks of leave. On the contrary, I believe this leave actually is a positive contribution to your work attitude. If you have more influence on the situation after your child is born, I believe you are able to carry out your work with more energy and inner peace.”
APG increases its ambition significantly, not only in terms of sustainability but also in the field of healthy office buildings for APG employees: both at the new premises in Amsterdam and in Heerlen.
The person entering the new premises of APG “Edge West” at the Basisweg 10 will immediately notice it: stairs. Not tucked away somewhere in a draughty staircase like in many offices, but in plain sight which implicitly says: “We are going to skip the elevator for today”. The daylight shining through the glass roof provides a bright-green color to the large trees and living walls. Water taps are to be found within a range of thirty meters on the APG office floors. Standing tables are placed here and there, tempting you to get out of your office chair once in a while.
Health and well-being at the office continue to be important themes for APG. Even now the workplace at home has proven its worth as an alternative due to corona. Marga Petridean, Facility Service contract manager housing at APG: “What we have learned from the corona crisis, is that working from home may be a good alternative, but also that the office continues to be an important place to come together and to get inspired. One thing we know for certain at APG: once the employees return to the office, health and well-being are paramount. A healthy and pleasant working environment contributes to the well-being of our colleagues and ensures for people to be happy to work at APG.”
The themes are taken very seriously by APG, according to Marga. A number of years ago, a certificate for well-being and health was introduced: the WELL Building Standard. Marga: “The design of our renewed office in Amsterdam makes us aim for the so-called WELL Gold certificate for the interior, in addition to the WELL Platinum certificate for the building shell which will be awarded to Edge West as one of the few offices in the Netherlands.”
After publishing this article, APG came to the realization that to achieve a healthy working environment in line with APG's vision it is sufficient to operate the interior WELL guidelines for our office buildings in Amsterdam and Heerlen without gaining certification. APG none the less acknowledges the value of the WELL standard and will continue to pursue it, but no longer with the ultimate goal of obtaining the certificate. However, it remains the intention to obtain the WELL platinum certificate for the shell building.
APG has asked CBRE Development Services to have the new office Edge Amsterdam West meet the requirements of the certificate. The building already has a high ambition with sustainability certification BREEAM Outstanding. So, what is the reason for yet another certificate? Zaida Thepass, Sustainability Consultant at CBRE: “In order to achieve the WELL certificate, measurements are actually taken within the building itself to assess whether you fulfil the requirements set for air quality, acoustics and lighting, for example. It is the first certification aimed specifically at the health and well-being of the users of a building. That is what distinguishes this certificate from many other quality labels. This standard was established after seven years of research and developed in cooperation with physicians, scientists and real estate professionals.”
It is much more than just a piece of paper, Marga emphasizes. “By meeting the criteria of WELL, we contribute to a higher level of well-being, better performances and a lower level of sick leave. The corona crisis has made us focus even more on air quality. So, we are very pleased that this is already incorporated in the WELL certification.”
We will also apply WELL to the building in Heerlen, Marga underlines. “As the building in Heerlen involves an existing construction, we have to conduct further research to what extent we are able to give shape and substance to the APG ambition with regard to WELL. That does not always have to be complicated. We already took a few well-being measures in Heerlen by, for example, removing the coffee machines from the workplace. That is a way of stimulating employees to walk more and to make quite a few steps in a day in a simple and unnoticed manner.”
Gerard van Olphen in response to Black Lives Matter
The death of George Floyd in Minneapolis has increased the global demand for joint actions in order to put an end to racism. The media and the public debate in the Netherlands have also paid a lot of attention to the subject. What is the position of APG in this discussion? Four questions to Chief Executive Officer Gerard van Olphen.
Is APG drawing conclusions from the developments related to Black Lives Matter?
“The global protests against institutional racism and police violence have caused a worldwide shock wave we cannot and will not ignore.” As an organization, we want to become more diverse and inclusive, also because we work for pension funds and their participants. We strive for an employee population reflecting the participants population of these funds and of society in general. In pursuing that objective, we want to encourage everyone at APG to be themselves and to present themselves. That is only possible when we make a statement against discrimination and work towards a culture in which inclusion is not an ambition but a reflex. A culture in which people are appreciated, regardless of cultural background, gender, and all other aspects in which people may differ from one another. As a matter of fact, we already started this development. The global social response evoked by Black Lives Matter confirms our belief that the attention for inclusion is incredibly important.”
Is discrimination something people within APG are affected by?
“It is not a theme capturing a lot of visible attention within the organization. But it would be naive to assume there is no discrimination within APG, that we do not have any people affected by it. Not everyone who is confronted with such conduct reports it - for any reason whatsoever. And not everyone who is guilty of discrimination, is aware of that fact. We all have our assumptions towards other people, sometimes even biases. That is almost inevitable. However, it is more important to ask yourself whether you are prepared to call those assumptions into question, to become aware of it and to adjust your behavior and beliefs. The subject is at least more existent, colleagues talk about it more often than they did in the past. And we also encourage colleagues to share their concerns and ideas. So we are able to show leadership that contributes to eliminating the disadvantages some people and groups have in this society, whether it involves race, gender, sexual preference or beliefs.”
What are the actions APG takes to combat discrimination?
“We already initiated a number of initiatives in the past years in the field of Diversity & Inclusion. In the coming period, we shall work our way from valuable initiatives towards a clear D&I vision and ambition. In order to achieve this, we will engage in a number of elements. Integration of D&I into our strategy, for example, but also the creation of awareness and exemplary conduct by role models within the organization. Our approach will be data-driven and is refined based on insights from HR data & analytics. Diversity and inclusion will also be reflected more expressly in our recruitment and selection efforts, for example by working with more diverse lists of applicants and selection committees. I firmly believe in that approach.”
When has APG achieved that objective of being a diverse and inclusive organization?
“If there is anything we have learned from our conversations with other companies, it is that realizing Diversity & Inclusion requires perseverance. We still have a long way to go, but the development has started.”
Unfortunately, this article is not available in English.
Companies in sectors at risk for involvement in human rights abuses show modest progress in respecting human rights.
A limited number of companies score particularly well in the annual benchmark, which was published for the third time in London on Friday. Adidas (apparel), Unilever and Marks & Spencer (agricultural products) and Rio Tinto (extractives) are leaders in their respective industries. In addition, there are a number of companies that have significantly improved their human rights performance since the launch of the CHRB in 2017, e.g. Inditex (known for the Zara brand), Heineken and Repsol.
On the right track
“The leading companies demonstrate that action on human rights is possible within a competitive framework,” says Anna Pot, Manger Responsible Investments US at APG Asset Management. “We see that corporate performance on human rights is improving. Companies disclose more information about their efforts and challenges and increasingly incorporate respect for human rights into their strategies. We are on the right track and should continue in this direction.”
While some leading companies have improved significantly, there is no reason to be complacent, says Pot. “Over half of the companies assessed fail to demonstrate they are meeting any of the United Nations Guiding Principles on Business and Human Rights’ (UNGP) requirements. These laggards need further and greater pressure to act, in particular on effective due diligence.”
APG, on behalf of its pension fund clients, was one of the CHRB co-founders in 2017 and actively takes part in the building of the benchmark. “We contribute to this since we, as stewards of capital, are keen to improve corporate human rights performance,” Pot explains. “The CHRB provides good quality data which we, as a responsible long-term investor, need to make investment decisions and to engage with investees.”
The CHRB measures how 187 companies in the apparel, food & beverage, extractive and tech manufacture sectors perform across 100 indicators based on the UNGPs on Human Rights. It uses publicly available information on issues such as forced labor, protecting human rights activists and the living wage.
APG uses the CHRB data to review (potential) investments and inform engagements with companies. This relates in particular to the thematic engagements that APG, on behalf of its pension fund clients, does in the apparel and extractive industries. Other investors are now using this data as well. “The CHRB is increasingly recognized as the standard on measuring corporate human rights performance,” says Pot. The merger with the World Benchmark Alliance (WBA), also announced on Friday, offers the opportunity to greatly increase the number of companies assessed on human rights performance.
“I am also glad to see that the scope of the benchmark is expanding to include more companies and sectors,” says Pot. This is all the more important since the results show that the publication of the CHRB can have a positive impact on corporate human rights performance.” This year, tech companies were included in the benchmark for the first time.
APG is different. It has two women and a “diversity officer” (a man) on the 5-member supervisory board and it adjusted the wage gap last summer. “This is a priority for us. We are way ahead of the commercial world.”
Francine, member of the supervisory board, who is responsible for the business component of Participant and Employer Services, and who was recently presented as a commissioner by engineering firm Royal Haskoning, also talks about her career step, from Marktplaats, Miss Etam and Xenos to APG, about diversity and about the sexist and inappropriate comments she still has to deal with inside and outside of the board rooms, in her interview with NRC.
And while talking about the usefulness of a women’s quota for top positions, she also overturns the counter argument that women that get to the top due to a quota are seen as token women. “That’s just nonsense. Then you’re missing the essence of why you would temporarily employ such a measure - and it must be temporary; 8 years, or, for example, two terms. It is to create an equal playing field and to break through an old pattern, by increasing opportunities for a group that is currently being insufficiently promoted and is under-represented in the top. We really must get rid of the idea of the token women.”
“My motto is: focus your energy on what you can change, how you can make an impact. Saying you don’t like something doesn’t count.”
She has spent her entire life sailing on the water, and yet, Carolijn Brouwer sees many parallels between her work and “normal” business life. During next week’s APG Summer Course in Rotterdam, the sailor takes along the directors of pension funds as she talks about her experiences during her sailing career. Topics such as dealing with setbacks, setting targets and leadership will be addressed.
Collaboration is the greatest resemblance with business life. You don’t have to be each other’s best friend, but you must be able to stand as one as a group”, Carolijn sets off. And this collaboration does not come naturally. You have to work on it, together. But how is this done?
“Communication is extremely important”, Carolijn continues. “We often sail under harsh conditions. And you can’t hear each other very well when the wind is blowing and the rain is pouring down. Imagine during the night, when it’s pitch dark, you are not even able to see one another. In that case, clear communication is incredibly important. Clear language, which is a challenge on its own, as there are several nationalities on the ship. The official language is English but the French, for example, are difficult to understand speaking English and that is hard to follow for our Chinese teammates.”
Working like an oiled machine
So Carolijn has worked very hard with the Chinese Dongfeng Race Team, with whom she participated in the Volvo Ocean Race, to become an oiled machine as a team. “We had to become one, but always leave room for improvisation. Out on the ocean, it has to be possible to change course. Following plan A and plan B, you sometimes have to move on to plan C due to unforeseen circumstances, such as the weather. If you know each other well and can communicate properly, you are able to respond to change in a more agile manner.”
No egos together
Looking back on her winning team, Carolijn continues: “Other teams sometimes envied the way in which we collaborated. Even though our team was very divers - seven men and two women of different nationality and age - we were a tightly-knit group. We didn’t only train our muscles on the water, we spent day and night together. We knew each other’s weaknesses and strengths. This also meant that we were able to bring out the best in each other, to give each other strength. That’s how we helped each other sail around the world. Our bond was unique. And that’s important for groups, also in business life. Make sure you create that bond together. Our captain didn’t choose us for our great sailing skills, he wanted to be surrounded by people who were strong as a person, especially during hard times. It wouldn’t work, putting nine egos on one ship.”
Leadership is another important factor when working together. “There is definitely a hierarchy on board. The captain makes all the decisive decisions, for example, when the ships capsizes and we have to get into the lifeboats. Other than that, there’s always someone in charge on deck and the rest of the crew is there to execute. But the entire process is democratic. We act in mutual consultation and the entire team is involved making a decision.”
Women at the helm
Another parallel that stands out to Carolijn: diversity in the workplace. “The sailing world is also dominated by men. I participated in the Volvo Ocean Race for the first time in 2014-2015 with a team entirely made up of women. The other seven teams were fully composed of men. My team didn’t do very well. Twelve years prior was the last time before this race that women were sailing along. We therefore lacked experience and training in terms of ocean racing. Mixed sailing was then introduced in 2017-2018. So, things are starting to move, but very slowly.
Thinking you can cope with anything
Carolijn considers it her duty, together with her French teammate Marie Riou, to fight for women in the sailing world. “You can see “women empowerment” emerge everywhere. We are trying to help young women and girls develop further in the sailing world. To earn their money professionally with this physical and quite extreme sports. When it comes to teams having to choose between a man and a woman, they often opt for a man. It’s a fact you can hardly ignore. But what we, women, would like to show is that our body allows us to get the maximum out of it. When I was as fit and strong as I could possibly be, I felt as if I could conquer the entire world. That was most important to me. I would never be as strong physically as that young Chinese man standing next to me, but in my head I was. I am trying to get that message across to the upcoming generation. I could do it, and so can they.”
And the diversity has broadened, as Carolijn has also witnessed. “The most important thing is for your team to have a mutual goal, no matter your gender, origin or age. If everyone has a unity of purpose, all differences between men and women, Dutch and Chinese, young and old just disappear. You are all working together to achieve a common objective. All of us wanted to win that Volvo Ocean Race, so we left all of those small and insignificant matters behind us.”
Taking care of your own retirement
In addition to the common goal as a team, Carolijn is also working on her own future. This subject is lacking similarity with the “normal business life”. “I will be standing in front of a room filled with directors of pension funds to give my speech, but I am actually not accumulating any pension myself! Olympic sailors are covered by the Waterschapsverbond (waterboard alliance) and will therefore build up pension. But this is not how it works in ocean racing: we always have to look for sponsors and investors and are not linked to a sector. My partner, who is also a sailor, and I invest in houses in the Netherlands and Australia which I consider my own pension accrual. But it might be an idea for pension funds to bridge this gap in the market. Because we are actually very much on our own.”
The APG Summer Course is an inspiration meeting for pension fund managers of funds that are clients of APG. During this summer school we challenge administrators and ourselves with new insights from "outside".
One of the speakers was Carolijn Brouwer; a Dutch sailor who was named the best sailor in the world in October 2018. She sees many similarities between sailing at sea and business.
Today, APG chairman of the board Gerard van Olphen has sign an agreement in The Hague under which the Dutch financial sector will commit to the targets of the Climate Agreement and the Paris Agreement.
He comes back to this idea several times during the interview: this is a unique commitment. It is the only one of its kind. ‘Pension funds, insurance companies, banks and asset managers are voluntarily committed to this approach and will be transparent in their accountability to society. This commitment on the part of the financial sector will have a truly enormous impact. After all, the sector makes up 80-90% of the money in the Netherlands. The signatories to this agreement today represent €3 trillion. This makes the Dutch financial sector a catalyst for and promoter of the transition that the Netherlands has to undertake. We are shaping the future. Contributing to the achievement. And yes, I am very proud of that.’
Of course, as Van Olphen also knows, industrial companies themselves have to make their factories cleaner. ‘We can't do that for them. They will have to reduce their carbon emissions themselves. But the fact that when we assess industry business cases we are not only evaluating financial feasibility but also compliance with the Paris targets, which means that polluting or less ambitious initiatives in the field of CO2 reduction will have more difficulty in obtaining funding than plans that really contribute to sustainability.’
The uniqueness of the joint declaration has not escaped the notice of neighboring countries either. In Brussels, in London, at the G20: the finance minister, sector representatives or Gerard van Olphen himself will discuss this commitment on various foreign venues in the near future. The international financial community welcomes this typically Dutch “polder manifesto”. Van Olphen: ‘The financial sector in many countries is more inclined to support climate agreements than to help shape them.’
What is it that makes this document so special?
‘In the financial sector, you are primarily responsible for other people’s money, so you have to have a solid risk/return profile. You can't tell people that their pensions will be lower because we have to finance the energy transition. But this is a huge commitment, and I would almost say it is catalytic. This is because we intend to determine and report on the CO2 impact of all the relevant investments we make. We will then agree on reductions in line with the Paris targets. In other words, 49% lower C02 emissions by 2030. And we will hold ourselves publicly accountable for this in the framework of a national accountability system. Once a year, as a consequence of the climate agreement, the minister consults Parliament with a view to explaining: are we doing enough in the area of the climate? Will we achieve our targets? This commitment is integral to that.’
You are proud of the commitment involved, but not entirely satisfied. Why is that?
‘When I was invited to be the chairman of the Financing Task Force, the scenario was that we wanted to bring a climate agreement to the Lower House before the parliamentary recess in 2018. The Netherlands intends to make rapid progress on the energy transition. That turned out to be a more difficult process than we thought. Initially, five primary committees were involved. Initially, financing was intended to play a supporting role, in the same way as the labor market. Our vision was that at the level of the primary committees - transport, agriculture, construction, electricity, industry - a great deal was already happening, and they would be coming to the financing committee with very specific investment questions. Such as: ‘we are planning to build a light rail from the Randstad to Schiphol, we need hydrogen power stations or we need large-scale electrification.’
But in practice, the situation proved to be problematic. ‘Because nothing happened.’ Sometimes as a result of conflicting interests, but also because there was no clear direction in the climate plans. There were still many options to be considered. The Netherlands is going to use electrification or hydrogen. Will there be any legislation on CO2 pricing? So a great many conditions for a successful business case had not yet been met.’ In retrospect, this was also very logical. The subject matter is comprehensive and complex and also requires broad public support, and I was probably a little naive at the outset as well.’
No direction, many different interests.
‘Someone told me what their experience was: ‘When I started I thought it was a football match. But halfway through I think to myself: I'm now standing in front of the goal and something is flying towards me. First it was a football, then it became a baseball somehow, and now that I'm expected to head it, I'm not sure it's not a bowling ball. And before I do that, I'd like to know for sure one way or another.’
Is that how you experienced it as well?
‘To put it diplomatically, our first phase was one of finding our way. What also became clear to us, besides the fact that there was a lack of direction, was that the committees were not familiar with the structure of the financial sector. When the issue came up at one of the committees: we need money, our counter-question was: what kind of money? Well, money. But what kind of money? Well, euros. The question from the financial sector is then: Risk-bearing, non-risk-bearing, short, long, hybrid? And so we developed a financing guide so that they could better understand supply and demand in the field of financing. We also worked closely with the majority of the primary committees, sometimes in joint workshops, sometimes through participation in the relevant committee or in some other way.’
In February of this year, after a great deal of media fuss about the affordability of the transition, the government issued a broad outline of their assessment of the agreement. This prompted the task group to consider its role in the follow-up. What's next? ‘We then agreed to focus on two things. The first was the commitment that we are signing today. The second was to help support Invest NL. In the meantime it had been decided to found Invest NL, an investment company belonging to the Dutch State and managed by Wouter Bos. Invest NL acts as a point of contact and facilitator for parties looking for financing in the context of the energy transition. It is the investment company that has received 2.5 billion from the state to advance the transition. The idea is this: we are not going to finance the energy transition with this EUR 2.5 billion, but if we invest it in the right place, the private market may be able to invest many times more than that on market terms, and this will make investment capacity available.’
And now we the commitment is there. Aren't you afraid that this will be a paper tiger? It seems like a horrible job to me to standardize the measurements.
‘The next chapter is: how do we make sure this happens? This must not become a paper tiger. This really must be something where the financial sector will genuinely be accountable to politics and society for their efforts. So there must also be an independent guarantee, and it will be difficult to say at first: party A reports using one standard, party B reports using another standard, but what matters is: is the underlying trend the right one? And if it's not the case, that party should be able to say: dear financial sector, you need to redouble your efforts.
And that independent actor will be there?
‘Yes, it is going to happen.’
The problem is that you can't impose sanctions. At best because parties that are lagging behind will have to account for their actions publicly. Or because the sector is exerting pressure.
‘My first instinct is not to resort to naming and shaming. But let's say hypothetically that if a party is known to be clogging up the works, the sector itself will eventually make corrections. The sector has now gained sufficient experience with painful situations where they have been called to account and have themselves been too slow to take action. Whether you look at profiteering policies at insurance companies, interest rate derivatives at banks or how pension funds communicate pension cuts, these social discussions have taught us that this is not how it works.’
So how does this affect APG itself?
‘This means that APG, as a company, is also committed to reducing CO2 emissions in line with the Paris targets. This implies decreased travel and reduced gas consumption. Everything that comes into play in society will also affect us as a company. Sustainability is not something that our clients necessarily expect from their investments, but it is what we expect at APG. This means that our annual report will state how much C02 we emit and how we are going to ensure that this will be 49% lower in 2030. What does that mean in terms of accommodations? In terms of how we travel? How are we going to heat our buildings? From 2020 onwards, the theme of sustainability will be high on the agenda of APG itself.’
And beyond the company itself - what does this mean for the stakeholders, consumers who read in the newspaper that the energy transition is unaffordable?
‘Of course, the transition will be costly. The idea that some of the news media presented was that in five years, everyone will have to cook electrically, or have solar panels on their roofs. So that's our starting point now, and the question is who is going to pay for it? But what matters is that you adapt to match the natural flow of the consumer. The financial sector will of course be there to support consumers in their decisions. So if you, as a consumer, want a new kitchen, then the lender will say: if you are going to make a choice anyway, then it's better to go for induction. That's different from saying: I've just had a new kitchen installed and now it turns out that I might as well replace my stove in two years’ time. When you are making choices about financing your kitchen, your house, your car, your company, you will find a bank, an asset manager or a pension fund that will say: we will help you finance your needs, but at the same time we will work with you to think about how you can make sustainable choices.’
Equal work will be rewarded equally at APG. More than 125 female employees of the pension delivery organization have received a letter today stating that from 1 June their salary will be brought to the same level of male colleagues with similar positions, experience and years of service.
APG conducted a study across the APG offices in the Netherlands. The study shows that women at APG in The Netherlands, receive an average 2.2% less salary at APG. More than 125 female employees will receive a salary increase on June 1. That is 13% of the total number of female employees. For the remaining 87% of women working at APG, there is no difference in pay with comparable male employees. APG employs around 3,000 employees, including 960 women.
The higher remuneration of this group of employees with an unequal salary is achieved within the existing budget of APG.
Marloes Sengers, HR director at APG: “At APG we stand for equal pay for equal work, which is why we rectify this today. The difference in remuneration will also be solved by us in a sustainable way: financially and with additional attention to managers and employees. In this way we prevent repetition in the future and we tackle the causes of the unequal pay in a sustainable and fundamental way.”
On Tuesday afternoon, February 12, APG received more than 100 elderly people from the Heerlen region at the head office..
Gerard van Olphen, CEO of APG, welcomed the elderly to the ‘ZilverUitje’, helped with serving and had a chat with the elderly people. Also acting mayor of Heerlen, Emile Roemer, was present to meet the elderly. Roemer: ‘The ‘ZilverUitje’ is of course an initiative that you can be proud of as a company. Especially when you look at the target group, what it is about and how you can put people in the spotlight. They are people who really deserve it. Yes, this ‘Zilveruitje’ is really beautiful. "
APG worked together with caterer Sodexo for the ZilverUitje. The National Elderly Fund was present with a stand, with which it draws attention to its initiatives: the ‘Zilverlijn’, the BoodschappenPlusBus and social activities.
Social contact is important for a beautiful old age
APG provides the pension for millions of people on behalf of their pension fund. Every day APG is working on a healthy financial future for teachers, civil servants, agents, construction workers, military personnel, medical specialists and other professional groups. But for a nice retirement, APG does not think a good pension is enough. Having human contact is at least as important. And because a large group of elderly people in the Netherlands have to do without or with very little social contact, APG makes an extra effort for them.
Initiatives APG to support the elderly
The ZilverUitje is one of the projects in a series of initiatives with which APG will devote extra effort to Dutch society in the coming years. At the end of 2018, APG announced that it would adopt the Zilverlijn: a free call service for lonely elderly people who indicated that they would like it to be called by an enthusiastic volunteer once a week. APG not only provides financial support, a large number of employees of APG call weekly on a voluntary basis with these elderly people.
As many as 1.4 million elderly people in the Netherlands face loneliness. As many as 200,000 of these people are extremely lonely. That means that social contact is anything but a matter of course for this vulnerable group of people. They only see another person once a month. To support them, APG is entering into a partnership with the The (Dutch) National Foundation for the Elderly. APG is adopting Zilverlijn: A free telephone service for elderly senior citizens who indicate that they would like to receive one phone call a week from an enthusiastic volunteer. As well as the financial support, APG employees will also be making phone calls to lonely elderly people voluntarily. The affiliation with The National Foundation for the Elderly is the first project in a series of initiatives with which APG will make an extra effort for Dutch society in the years to come.
Holiday periods are especially difficult for elderly people. Care providers and volunteers spend these periods with their families, which means that some elderly people barely receive any visits. That's why we plan to start making calls in precisely this period. By taking action for Zilverljn APG is hoping to contribute to relieving the loneliness of this vulnerable group of elderly people.
Gerard van Olphen, chairman of the Board of APG Group: "Together with pension funds, APG builds on a sustainable financial future for millions of Dutch people. But a good pension alone is not enough for a for a contented old age. Human contact is at just as important. Viewed from that perspective, the partnership with the The National Foundation for the Elderly is a perfect fit for the social role that we as APG want to play."
Corina Gielbert, managing director of the The National Foundation for the Elderly: "The partnerships with socially committed parties like APG are extremely valuable to us. The fact that APG employees are willing to communicate voluntarily with elderly people who would like to be called through Zilverlijn is valuable and could be a life learning experience. We know from experience that pleasant and also frequently emotional phones are made on this basis."
About The National Foundation for the Elderly
The National Foundation for the Elderly supports elderly people in the Netherlands with practical services and activities. Examples include beach outings, the BoodschappenPlusBus ('shopping-plus-bus'), OldStars walking football, Zilverlijn and Christmas dinners. All of the services and activities are intended to encourage social contact and self-reliance among elderly people in order to combat loneliness.
How does APG as an investor contribute to the United Nation’s Sustainable Development Goals? That was the theme addressed by Ronald Wuijster, CEO APG Asset Management, in his speech yesterday at the annual Junior Chamber International (JCI) congress.
Some 4000 young people from more than 100 countries came to Amsterdam to discuss the goals the UN has agreed on to make the world more sustainable.
Let’s put the planet first
The congress at the Muziekgebouw aan ‘t IJ was opened by UN-icon and Nobel Peace Prize winner Kofi Annan who called on young people to raise their voices. According to Mr. Annan that is especially important in times of increasing populism. He referred to the Brexit-referendum in which many young people did not participate, resulting in the older generation having the decisive voice in leaving the EU. Besides this, Annan emphasized how important it is for the world to stand by the Paris Agreement on fighting climate change adopted in 2015. “I would say: let’s put the planet first.”
Kofi Annan’s influence on APG policy
In his speech Ronald Wuijster referred to the influence Mr. Annan has had on APG’s responsible investment policy being implemented from 2008 on. As Secretary-General, Mr. Annan was the founding father of the UN Global Compact, which defines how companies must behave when it comes to human rights, labor rights, the environment, and fighting corruption. These principles still form the foundation of APG’s approach today. Wuijster elaborated how this policy has evolved in recent years. When making investment decisions not only are returns, risks and costs taken into account, but increasingly sustainability and responsible business practices, with a prominent role for the UN’s Sustainable Development Goals. In 2020 APG wants to have at least 58 billion euros invested in Sustainable Development Investments that are not only financially attractive but also contribute to the UN-goals, such as renewable energy and sustainable real estate investment.
More about JCI
Junior Chamber International (JCI) is a non-profit international non-governmental organization of young people between 18 and 40 years old. It encourages young people to become active citizens and to participate in efforts towards social and economic development, and international co-operation, good will and understanding.
Demonstrating leadership means taking the lead in difficult situations. Combining something statistical, such as investing, with a broad concept such as human rights is a such a situation.
But at the same time this is something that pension investors, who select and manage millions in investments in a responsible way on behalf of participants, cannot circumvent. The realization that a way had to be found to measure in a structured and standardized way how companies deal with human rights, was broadly shared. This is why in 2013, a number of international investors, including APG, joined forces with social organizations and jointly established the Corporate Human Rights Benchmark. The objective of the Corporate Human Rights Benchmark (CHRB) is to rank companies after completing an assessment based on a hundred indicators that provide some information about their human rights policy and practice, such as working hours, remuneration, physical working conditions, and preventing child labor. Aside from this, the benchmark specifically looks at the way in which companies respond to allegations of irresponsible behavior. The analysis is conducted on the basis of public information and input provided by the companies themselves. The first CHRB ranking was published in March 2017.
Here you can read the full article.
It is increasingly important for consumers to take responsibility for decisions about finances and work. Consumers will have to be better prepared in the future to address the effects of disability, unemployment, divorce, retirement or other family events themselves. In this Netspar paper investigates how consumers can be better enabled to manage risks themselves.
Confidence and ease of new financial applications via mobile devices.
Netspar paper Effective self-management support by, among other APG Alwin Oerlemans Collective provisions for social security and income (including pensions) are the last decade systematically retrenched and discussions are about the individualization of what there is left of it. At the consumer this is not yet reflected in a visible need for personal advice, but the low consumer confidence figures in institutions and financial parties speak volumes. As a consumer, you're on your own, that's the feeling. At the same time we are learning more about consumer behavior. We see that consumers are willing to share information and resources via new networks (supported apps), a large majority is online and is served by convenience new financial applications via mobile devices.
Understanding and action perspective
Roboadvicing is in the experimental stage, financial institutions, technology companies and regulatory authorities (DNB, 2016) look at how the rise of FinTech can help relieve the lives of consumers. On the labor market, we see rapid changes. An increasing proportion of the workforce has a temporary contract, working through a temporary business or yourself to work as freelancer. Keywords in the new economy have flexibility and choice. How the consumer is better able risks in terms of income, finances and work to manage themselves. Possibilities are integrated lifecycle planning and other options in the light of recent technological developments. The aim is to give consumers insight into his situation and an action perspective offer, both in terms of finances and assets as work and income at all stages of life.
Labor and financial services
This requires platforms required where consumers can find each other, information and solutions. Who makes these platforms come? What can the government do to make this a success?
Only in this way can be a response to the continuing shift of risk from government and business to any consumer and acting. Workers increasingly need to support their employability and financing of the life. Here the labor market affects the financial services market. The scope of collective employment is limited, these are increasingly the character of individual packages. At this junction which matches service workers by the hand, guides and helps to make better choices in their lives. These choices are about investing in employability, transitions to other work and save and invest for later when there is no income from work (more). How to provide these services in respect of finance, insurance and labor input form is the main question in this paper design.
Claims for consumers, providers and government
The researchers come, on the basis of the analysis of building blocks, business models, and bottlenecks, concluded at three levels (micro-consumers, meso - provider and macro-government). Consumers there is a need for convenient, but also personal and analytically sophisticated, supporting financial and career planning. For providers appears to be a co-creation model to offer the most opportunities, involving both cooperation with consumers, as with other providers. The researchers see different possible roles for providers, ranging from a role as an independent platform (commercial or represent consumers), to the development of an existing feature such as pension provider to a fully fledged self-management environment. The role of government is to indicate relatively less bright. Laws will have to find a balance between allowing, for example, flexible data exchange
between the parties, if the consumer so desires and safeguarding the privacy of consumers who do not want information to be shared.
The ambitions of the Bright Lands Smart Services Campus in Heerlen are grand. So will they attract hundreds of new companies and start-ups, 2,500 new jobs and 1,600 students. The campus is a joint venture of pension manager APG, Maastricht University and the Province of Limburg.
Talent and innovation
"It's APG absolute necessity to access new talent and innovation," said Chief Operations Officer Mark Boerkamp. "Our pension funds to new services." Campus Director Peter Verkoulen and Boerkamp emphasize that they do everything to succeed the initiative. They have committed to at least ten years, as the province and the University of Maastricht. Ten start-ups have already ventured the step to the campus, like Accenture and IT company Conclusion. "There are already about 250 people on campus actively," says director Verkoulen.
See the full article in the FD Dagblad on 12 September (in Dutch).
As a follow-up on the quantitive analyses of European Women on Boards in april 2016 a qualitative study on board gender diversity was published this July. It is based on interviews with twenty important business and governance leaders from across Europe, comprised of board members from large listed companies, institutional investors, and others. On behalf of APG David Shammai shared his vision on the subject.
- Both European companies and investors are increasingly convinced that a well-diversified board adds value to the company.
- There is a growing body of evidence which makes the business case that board gender diversity can provide a competitive advantage.
- In addition to implementing best practices to improve overall Board gender diversity, many European companies are now sharpening their focus on developing the executive leadership pipeline for women.
- Board gender diversity provides a governance and management quality signal for an increasing number of mainstream institutional investors.
- Investors report that the focus on gender diversity has contributed to a higher standard of professionalism by encouraging the nomination committee to more fully consider the board’s needs in terms of the balance of skills and experience.
Board gender diversity in integrated engagement and active ownership strategies at APG Asset Management
At APG Asset Management in the Netherlands, the approach to gender diversity is mainly reflected in its engagement activities, with both social as well as governance considerations at the fore. Board gender diversity is viewed as one important form of diversity amongst several. Engagement with portfolio companies is often carried out jointly by the portfolio managers in conjunction with the responsible investment and governance team, which use a variety of ESG data screens to inform input. Diversity throughout the organization is more of a social issue that underpins companies’ long-term legitimacy and thus is a sustainability issue.
David Shammai, Senior Corporate Governance Specialist APG, highlights effecting change appropriately, which involves weighing up a variety of priorities. In the context of board gender diversity in Europe, APG is seeing a growing number of cases where the need to appoint women directors has led to the nomination of over-boarded directors. "This puts shareholders in the very uncomfortable position of having to make a choice effectively between lack of diversity and overly busy directors who don’t have sufficient time to meet their board responsibilities. We believe that this is not good for board effectiveness and probably also not good for credible diversity." APG expects companies in these cases to broaden their choice of director candidates further. "For example, for some companies where language is seen as a barrier to diversify board selection, perhaps it makes sense to have non-nationals as directors, even if they are non-native, yet fluent, speakers of the national language."