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Topical issues in the field of economy, (responsible) investment, pension and income: every week, one of APG's experts provides a clear answer to this week's question. In this edition: Thijs Knaap, Chief Economist at APG, on the benefits of the much-discussed hub function of Schiphol airport for the Dutch economy.

Personnel shortages, long queues, the cancellation of flights. Schiphol airport has been a hot topic in the news again lately. An element of discussion here is whether or not the airport should fulfil a hub function. For a significant portion of the passengers, Schiphol airport is not their starting point or final destination but they only use the airport to transfer flights. In 2019 this involved more than one third of the 71 million passengers calling in at Schiphol airport. Are all of those transfer passengers really that beneficial to the Netherlands?

Network effect
According to Knaap, two elements are of importance. “The first element are the transport costs, meaning how much it costs to travel from the Netherlands to a foreign destination and vice versa. When a country has a large airport, such as the Netherlands has with Schiphol, the transport costs to that country are low because there's a bigger chance of direct flights and several airlines are competing with one another. Good accessibility is an advantage, economically speaking. The second element are the so-called network effects. That network effect enables a city or country to attract activities. If you are the first or most important company somewhere, the rest will come to you. There's not a lot to gain from the transfer passengers themselves, but the hub function does ensure that many airplanes travel through Schiphol, meaning we are well accessible as a country. Thanks to that network effect, more companies settle in the Netherlands providing more growth. If that's the goal, good connections are essential.”

Goal
It's difficult to say what the gain of such hub function is in a direct sense, Knaap says. “The few euros you earn for each transferring passenger will not make the difference. You could say that accessibility is the gain that eventually ends up with, for example, companies that benefit from it, with the Dutch holidaymaker who flies abroad easily and quickly and with the government by means of extra tax income. A part of that gain can be attributed to an increase of prosperity and that is difficult to measure. That also brings us to the point that the many flights from and to Schiphol airport also contribute to environmental pollution and noise nuisance. Those arguments are mainly presented when it comes to the transfer passengers at Schiphol airport, because they don't generate money for the Dutch economy. That's why many people ask themselves: ‘What is the actual usefulness of the hub function?’ But the goal is not the people transferring flights, the goal is the fact that the airplane flies to Amsterdam. The fact that an airplane departing from America or Asia arrives in Amsterdam is what makes the transport costs lower for the Netherlands and that's what it's all about.”

The considerations in favor of and against a hub function are changing over time though, Knaap says. “Thirty years ago, the general tenor was: ‘Let's build yet another landing strip’. The argument used in the past to make Schiphol airport grow, more employment opportunities, is less powerful since there are enough jobs available in the Netherlands. At the same time, we are currently dealing with housing shortages and more attention is paid to the environmental pollution and noise nuisance caused by Schiphol airport. That can also be seen in the debates where the general tenor now is: Just have Schiphol airport shrink.”

Balance
The millions of transfer passengers at Schiphol airport are therefore not directly beneficial to the Dutch economy. The hub function does ensure low transport costs and a possible network effect, advantages that are difficult to quantify. A balance between, on the one hand, the desire to maintain the hub function and, on the other hand, to decrease the number of flights, is difficult, according to Knaap. “You cannot say that by cancelling 50 percent of the flights, you will still have half of your hub. It would mean the hub no longer exists, because you need a minimum number of transfer flights. But it continues to be a guess how many flights would be needed to maintain the hub function.”

Who are these people who deliberately choose to work in the retirement industry? What do they do there all day for your retirement? And what do they like about their work? We take you behind the scenes to take a look.

Stan Russell (30) is senior engagement manager at Geldvinder. Along with his team it is their mission to make everyone in the Netherlands financially fitter. “Personal finance is still a bit of a taboo subject.”

What is Geldvinder?

“An online financial platform within APG, with which employers can help their employees structure and improve their finances in an accessible way. Think of it as an online financial coach. Users start with a fit test to map out their income and expenses, buffer and risks, assets and debt as well as their retirement savings. This results in a certain fit score of between 0 and 100, which provides information about someone’s financial situation. It gives a very accurate picture. You shouldn’t see the score as a conclusion, but rather as a starting point from which you can set your financial goals. Some goals are easier to achieve than others; sometimes you work on several goals at the same time. Because people’s financial situations change quite a bit, Geldvinder aims to guide users in the long run.

What is APG's interest in this?

“APG started this because the retirement saving system is changing. It is no longer one size fits all, people are increasingly gaining more insight into their own retirement savings. On the one hand, it is a good thing but on the other hand, it also comes with more responsibility. APG believes it is important to help their clients with this. Of all four financial domains in Geldvinder, people score the lowest on retirement savings. That is partly because of ignorance. We want to offer clear, reliable information so that participants can make good choices. Because making the wrong decisions about financial matters can have devastating consequences. Geldvinder is a non-profit start-up with no commercial partners, and that is quite unique. The details you fill in are also not shared with third parties. Employers can see what their employees have filled in and where their challenges lie, but they can’t see it at an individual level. So far it has been a tremendous success. In the first year, about 20 percent of employees with which we cooperate were using the platform.”

What does a senior engagement manager do exactly?

“On the one hand, I maintain contact with organizations that are affiliated with Geldvinder. On the other hand, I give presentations at qualifying organizations to find out whether Geldvinder can complement their vitality policies.”

How did you get into the world of retirement?

“Via LinkedIn. My current boss, who I already knew, posted something about Geldvinder and I thought it sounded interesting. I applied for the position and started a year and a half later. In the middle of the covid-19 pandemic, yes. I have only met my direct colleagues in person a few times, which is kind of crazy.”

What is your background?

“At first I was working as a recruiter for consultants, focusing on innovation. An enormous niche, but it taught me a great deal about innovation. At some point, I no longer wanted to serve those who make a change, but I wanted to make the change to the content myself.”

Working in the retirement industry doesn’t really seem very sexy?

“I can imagine that people might think that; it's not the best opening line at a party. But actually, the opposite is true, for me at least. At a start-up in a large corporate such as this one, you can do a lot of experimentation and innovation. I like the fact that on the one hand I can still speak to new people and on the other hand be involved in developing a platform. I can get involved in everything. That’s what’s so great about a start-up. In addition, communication lines are short and I work with resourceful people who are just as motivated to let our platform grow.”

What motivates you in your work?

“Personal finance is still a bit of a taboo subject. It is a difficult topic to discuss openly. When giving a presentation, I notice at the beginning that people find it difficult to talk about the topic, while afterward there is an avalanche of examples from HR departments. That is what I still like best about it. We literally make it possible to talk about finances in the workplace. It gives me energy. Moreover, I really believe in Geldvinder. The fact that it was built up from so much knowledge and expertise by users and organizations, makes Geldvinder unique.”

Why is financial fitness so important?

"50 percent of Dutch households are financially vulnerable, and 33 percent of these households do not make financial plans. These are frightening numbers. While we know just by making small adjustments can eventually make a huge difference. People tend to distinguish between mental and physical fitness, I think that’s an outdated approach. Many people don’t only exercise for their physical well-being, but also for feeling good mentally. Finances are part of this. If you have money troubles, it affects the way you feel. Many people will probably think: What does my employer have to do with my personal matters? But private and work-related matters are not so easily separated as they once were, you take your private life to work and vice versa. Worries don’t just disappear once you walk into the office. Therefore, it is also relevant for employers to focus on the vitality of their employees.”

How financially fit are you, exactly?

“The first time I scored something like 42, which is really terrible. I suppose you can say it’s a case of the shoemaker’s son going barefoot. My income and expenses were insanely out of balance, I did a lot of stupid things. For example, I had subscriptions that I barely used, and yet I let them continue for years. I also knew very little about the budgets to which I was entitled through my employer. So I started with Geldvinder and a year and a half later my score was at a much better 67. And it keeps on getting better.”

What does an average work day look like for you?

“We mostly get together as a team to discuss current issues, digitally or otherwise. After that, I usually have one or two presentations at organizations such as a municipality, province, or government department. Once there, I present Geldvinder and share the experiences of users and clients. I always enjoy lunch in our new Edge office, one of the most sustainable buildings in the Netherlands. Later in the day, I have telephone calls with interested organizations about Geldvinder. Those are without any exception great conversations.”

What do you do in your free time?

“I often go for hikes in nature, often while listening to a podcast. I love everything Gijs Groenteman does. In terms of music, I like listening to Bob Dylan or Elvis Presley. My greatest hobby is strolling through Amsterdam. Going to the market, and buying fresh ingredients, there’s nothing I like doing more than cooking. Just the other day I hosted a wagyu evening. Wagyu is a Japanese beef delicacy and in terms of quality the Ajax of the market. You should give it a try. Oh yes, and I’m an extreme fan of Italy. I’m thinking about going to Bologna for an extended holiday or sabbatical. It is one of my financial goals.”

What qualities make you suitable for this job?

“The courage to discuss money matters. I wouldn't have done this job if I were afraid of confrontation. I’m also someone who really wants to make an impact, which is particularly important in a start-up. You pretty much have to invent everything yourself - you have to like that. If you’d rather have someone lead you every step of the way, it will be agony. But freedom is exactly what I like.”

What retirement clients notice about your work?

“We offer them Geldvinder, which allows them to have a much better grip on their financial situation. Eventually, it also influences their retirement. I see it as our role to make people aware that more freedom in terms of retirement is not only great, but that it also involves a certain responsibility.”

Current issues in the field of economics, (responsible) investments, pension, and income: an APG expert gives a clear answer to the question of the week. This time: Marco van Eijkelenburg, Senior Portfolio Manager Commodities, on the question what the Netherlands will notice of Russian Gazprom discontinuing gas supplies to Dutch GasTerra.

The reason that the Russian state-owned gas company no longer delivers to the Dutch gas distributor as of June 1st is that it does not want to pay the bill in Rubles, something that President Putin is demanding. Poland, Bulgaria, and Finland have already been confronted with the Russian sanction. According to Environment Minister Rob Jetten, the decision by Gazprom will not have consequences for Dutch households. But not everyone is convinced of this. Mijnraad, an independent advisory body of the government warned that a gas shortage could have “very large social consequences”  The international energy agency IEA also warns for an energy ration.

Alternatives
Marco van Eijkelenburg points out that GasTerra already has alternatives for the Russian gas. “I therefore do not think that this action by Gazprom will have major consequences for the Dutch gas reserve, although GasTerra will have to pay more for those alternatives than for the Russian gas. With its gas roundabout [infrastructure interchange for transport and storage of natural gas], the Netherlands has a favorable position with respect to the gas supply. As a direct consequence of the Russian invasion in Ukraine, there will be an accelerated scale up of capacity to import liquid natural gas (LNG). Gasunie, the state-owned company that takes care of the Dutch natural gas transport has rented two floating LNG facilities to expand the new LNG terminal at Eemshaven.”

This terminal, with an annual capacity of 8 billion cubic meter, will become an important supply line, Van Eijkelenburg explains. “We use approximately 40 billion cubic meter natural gas in the Netherlands per year, of which approximately 15% comes from Russia. If needed, there is always the gas field below Groningen, although that is politically sensitive. If there is a shortage of gas this coming winter, the government will first disconnect large industrial users from gas so that the delivery certainty for households and specific essential social services, such as hospitals, can be guaranteed. So, the Dutch consumer does not have to worry about the delivery certainty; it does however have to worry about the gas price. Especially when there is a variable contract and a cold winter.”

However, that higher price is not specifically caused by Gazprom discontinuing its delivery to GasTerra, Van Eijkelenburg emphasizes. “The increased gas costs have more to do with the fact that the entire gas supply from Russia is decreasing, partly because European countries want to move away from Russian gas, and partly because Russia is demanding payments in Rubles. The developments surrounding GasTerra and Gazprom are therefore part of a wider trend that is happening, and that brings along a lot of uncertainty. And that uncertainty about future gas deliveries can already be felt in the price. Directly in the gas price, as well as indirectly in the prices of goods. If the situation in Ukraine escalates further, with all the associated consequences for the Russian gas deliveries to Europe, the gas price can increase even more.  But it is also possible that Gazprom will discontinue even more deliveries, but that there is a price decrease after all. Simply because the current price already accounts for a negative future scenario.”

Gas supply
So the relatively high price we currently pay for gas is partly because the future uncertainty is already included in the price. What is striking is that the Dutch gas reserves are filled less than 40 percent. The government wants to replenish this to 70 percent, but the Mijnraad advises to do this to 100 percent. According to Van Eijkelenburg it is indeed wise to replenish the Dutch gas reserves as much as possible in the coming months before winter starts. “You have to take into account the worst possible scenario where more Russian gas supplies to Europe are discontinued in the short term and that we will have a cold winter. If you have the option now to best prepare yourself for this, you should do that. Europe will only import less Russian gas in the coming years, so the extra natural gas that was purchased will come in handy.”

We should regard Gazprom’s discontinued gas delivery to GasTerra as a small step in the larger movement to move away from Russian gas. “By definition, such a sudden boycott is a disruptive process and will never be gradual. Because of this, the predictability of supply and demand will decrease, and the prices will increase because of the increased uncertainty. But the delivery of gas to consumers will not be compromised, partly because of the increased expansion of the Dutch capacity to import liquid natural gas.”

APG has been named a market leader in engagement by EY. This is evident from the consultancy’s Engagement Maturity Matrix. A good reason to ask Anna Pot, Head of Responsible Investment Capital Markets & RI Communications at APG, some questions about engagement.

According to EY (formerly Ernst & Young), characteristics of a market leader are actively driving positive change and setting the market standard for institutional investors. A good result for APG and its pension fund clients. At the same time, public opinion seems to be increasingly critical. For example, some pension fund participants want their funds to invest as sustainably as possible.

How can this be reconciled?

“I think two things are important here. The first is that participants and the media in the Netherlands are critical.  When it comes to sustainable investment, the expectations and ambitions among participants and our stakeholders in the Netherlands are high. And that’s actually very good, because fifteen years ago, when we were developing awareness around responsible investment on behalf of our fund clients, it was not such a big topic yet. Today, it is a very important consideration and people have high expectations around it. Pension fund participants are learning more and more about this subject. In that sense, you could say that the pension funds have succeeded in propagating the importance of SRI. And the critical part of the constituency is growing. That means we are offering something that the pension fund participants want from us. In fact, they want us to do even more in this respect.

Another important point is that we were compared to institutional investors abroad in this study. There are also many developments in sustainable investment among the other big players but in the Netherlands, we are in the lead. As APG, we are seen as a leader that other parties are happy to work with and support. That leading position also helps us to align other parties with our goal of investing as sustainably as possible. That cooperation with other parties is essential to our success and to achieving our sustainability ambitions as well as those of our fund clients. It is therefore important that we are also seen as a leader in the international field. So, I am very pleased with this result.”

When does APG see itself as the leader in responsible investing, when experts like EY think so or when the public thinks so?

“We are never satisfied. We are very ambitious and critical of ourselves and always want better results in responsible investing. After all, our goal is to make the world more sustainable. In any case, it’s nice to see that our efforts are being recognized. And not just by EY. Another example is the Principles for Responsible Investment (PRI), an organization supported by the United Nations. The PRI assesses us annually and it’s always nice when we see growth in that. And then there is the Association of Investors for Sustainable Development (VBDO), which assesses the fifty largest pension funds in the Netherlands in terms of sustainability. Our fund clients are in the top echelons there. Last year, for example, ABP was ranked number one for the fourth consecutive time. In that sense, external assessments are nice, but are they a yardstick? No, they are indications that we are doing well and that we are seen as a leader. Of course, what really matters is the impact of our efforts. For example, a company following up on our engagement requests. Or the fact that we are making our investment portfolio more sustainable. Another example is that more companies are attaching green goals to the issuance of their loans (bonds), or that our real estate companies are operating in an increasingly energy-efficient manner.” 

There are many forms of engagement. What is an example of a form in which APG is particularly strong?

“EY specifically mentioned our so-called inclusion policy. This means that we can only invest in a company that lags behind in terms of sustainability if we expect that engagement can lead to improvement. It is a very systematic way of setting priorities in the engagement policy we pursue for our funds. We ask ourselves the question with which important companies in our investment portfolio we can still make gains in terms of engagement. Is it worth our time and energy? Or should we decide to stop engaging with a company if we feel it is not producing enough results? We also take into account that if a company becomes more sustainable, it is a better investment in our portfolio. We score high on this form of engagement, which is very closely related to our investment choices and portfolio. It also earns us a lot of appreciation. It is something in which we are unique, compared to other institutional investors.

We also have thematic engagement processes that we perform on behalf of our pension fund clients and that are seen as leading the way in the market. One example is an engagement path on the transition in the automotive industry. We are asking car companies to become more sustainable and to switch to a carbon-neutral business model. That means they have to manufacture electric cars instead of diesel cars. In this sense, sustainability is about climate targets, but in our commitment we also focus on these companies’ personnel policies. Because whereas manufacturing an internal combustion engine car requires five employees, an electric car requires only one. It also requires different skills. As a company, you can do two things. You can say: we’ll lay off our current employees and look for new ones. Or you can try to use your staff differently so that they can keep their jobs. And that’s what our engagement is all about: make sure that as a car company you also have a strategic personnel policy that focuses on training and retaining staff where possible.”

There’s probably still room for improvement.

“I think we can make the outcomes of our engagement more visible. Conversations with a company we invest in, for example, can lead to a new policy or committee. But how can you concretely reflect the impact of that? If you take the example of the car industry, it’s about how many people still have a job in the end. It is difficult to communicate that in an effective and honest way. Reporting on the impact of our engagement is therefore an important area for improvement. Making the results of our engagement more visible also touches on the point where we started this discussion: the critical note in the Netherlands. We must continue to bring our efforts into the limelight. Also because we think it is extremely important that participants know how we invest their pension money.”

Current issues related to economics, (responsible) investment, pensions and income: every week an APG expert provides a clear answer to the question of the week. This time: Thijs Knaap, chief economist at APG, talks about the consequences of the strong dollar for Dutch consumers.

At the start of 2021, one euro would fetch 1.22 dollars. At the beginning of this year, it was still 1.14 dollars and now the exchange rate of the euro has fallen to around 1.07. This means the euro is still worth a little more than the U.S. currency, but the difference is pretty small. Just after the introduction of the euro, at the beginning of this century, was the last time that the dollar was stronger than the European currency. At that time, you’d get a paltry 83 cents for your euro. Around the credit crisis of 2008, however, the euro was very strong again and was worth 1.60 dollars. So, the exchange rate fluctuates considerably. What factors play a role in this? And what does the Dutch consumer notice about the more expensive dollar?

More expensive vacations

With an exchange rate, three things come into play, Knaap explains. “Dutch consumers immediately experience the first one. That is because American products that you have to pay for in dollars, for example on the internet, become more expensive. Vacations to America also become pricier.” In addition, there is an indirect consequence. “Very generally, you can say that there are two large economic blocs that compete in the world market: America and Europe. Our power as Europe to buy products such as gasoline on the world market at a competitive price, for example, depends very much on what the euro is worth against the dollar. Now that the euro is weaker, we have to bid against the stronger dollar on the world market. That leads to products currently becoming more expensive for us than for Americans.”

The second force that plays a role in the exchange rate is the financial markets. “There is always a need to put excess money away somewhere in the world, for example in a bank or by buying a government bond. Then it matters what the interest rate is, and it is now quite high in America and quite low in Europe. So, it is more attractive to put money away in America, which increases the demand for dollars and makes that currency more expensive. The current high interest rate in the US is therefore the biggest reason for the strong dollar. Because although the global flows of goods are big, the financial flows are even bigger. These therefore have the greatest impact on the dollar exchange rate. If the European Central Bank were to raise interest rates now, the euro would become somewhat stronger, but that does not have a one-to-one effect. Financial markets also take into account expectations about the U.S. and European economies. The European economy is somewhat weaker, for example due to the war in Ukraine. The rise in US interest rates will therefore be stronger than in the eurozone.”  

Safe haven

The fact that the dollar is still seen as a safe haven is the third factor influencing the exchange rate. “Anytime there is a calamity somewhere in the world, like right now the war in Ukraine, investors get scared and take their money to the U.S. and buy dollars. They do so because they have learned through trial and error that at the time of misfortune, the dollar rises in value. There is some debate as to whether the US really is that safe for investors anymore. Think of the period under President Trump, for example. But for now, Washington has nothing to worry about. Just look at the beginning of this year: Russia invades a country and boom, all the money goes to the US.”

There is also a reason to be happy with a cheap currency. After all, European products are now cheaper on the world market and will therefore be sold more, which in turn can lead to more employment, for example. In that sense, Europeans can benefit indirectly from a cheap European currency. This also applies to the Netherlands, although additional employment can currently also lead to a further tightening of the labor market. “Despite the fact that a large part of our exports remain within the euro zone, trade with non-euro countries still plays a major role in the Dutch economy. A cheap euro is therefore not only good for exports of German and French cars or Italian fashion, but also for Dutch exporters.”

Long term

So, possibly extra jobs for the Netherlands, but also more expensive American products and vacations. Those prices will only go down again when the exchange rate of the euro rises. What is needed for that? “In the short term, a higher interest rate,” Knaap says. “In the long run, it will work itself out: the cheaper euro will lead to so much trade that demand for euros will increase and demand for dollars will decrease. An end to the war in Ukraine will also make for a stronger euro.” For now, the U.S. currency will remain strong, Knaap expects. “In the US, they’re really raising interest rates, which will further shore up the dollar. I would venture to say that the dollar will be a lot weaker in five years, but next year it may well be stronger than it is now.” So, for the time being, American products and vacations will remain relatively expensive for Dutch consumers.

How do you deal with work and money for now and for the future? Do you live one day at a time, or are you consciously planning your financial future? And are you setting things up for your future yourself, or do you belong to a pension fund? Sandra Boon lives as a “digital nomad” and can work anywhere in the world – as long as there is Wi-Fi.

Sandra Boon (30)

Profession: online entrepreneur

Works how many hours a week: between 20 and 40

Income: between 1500 and 2500 euros (net)

Savings: 10,000 saved, 15,000 invested

Pension set up? Yes

What exactly do you do?

“I am an online entrepreneur, and I do web design and online marketing, among other things. I also have a blog, I wrote a book about how I deal with money and I teach a course on dealing with money. I started my own business at 16 and taught myself everything from building websites to coding. I never had a paper route or a side job in a supermarket.”

How many hours a week do you spend on your business?

“It varies. When I’m in the Netherlands it’s usually full time, but when I’m on the road it’s more like twenty hours a week. I earn part of my income passively through affiliate links on my blog, among other things. When people buy something through those links, I get a certain amount. And when people buy my book, it is sent by another company. That brings a lot of peace of mind. I love being able to plan my own time, it feels very free. When you travel, you don’t always have the option to work; if you’re an online entrepreneur and there’s no Wi-Fi, that’s it. I have a small camper that I travel around in. I just spent over five months away, with my dog, who unfortunately passed away a few weeks ago. The fact that I can now take some time to deal with this is also one of the benefits of the way I’ve arranged my life.”

How much money do you make?

“On average between 1500 and 2500 euros a month, net.”

Are you happy with that?

“I think it’s absolutely fine. I did earn more before; there were months when 8,000 euros came in, but then I would spend just as much. I traded in my old Toyota for an Audi, we moved from a small social housing unit to a large semi-detached house. Everything was upgraded, but that didn’t make me happier. I had to work very hard for it and outrun myself. It just wasn’t worth it to me.

A few years ago, when my relationship ended, I realized that I had nothing to show for all that hard work. That’s when I then changed my whole lifestyle in order to manage my finances a little better. I started saving for my retirement, bought a small house and started to watch my spending. Now I’m in the position of having things pretty well sorted out. That gives me a lot of peace and freedom. I don’t need to make a lot of money. The less I spend, the less I need to work. People who don’t know me think I’m a bit of a slacker. And there actually are weeks when I don’t do anything, but I can afford that. I created that luxury myself. I’m very glad I made that choice, because otherwise I’d still be living from paycheck to paycheck, so to speak.”

How much do you have in savings?

“I usually keep around 10,000 euros purely as savings, and in addition I also have about 15,000 euros invested.”

What are your basic monthly expenses?

“In total, they amount to about 1250 euros. The largest part goes to housing costs, my mortgage at 750 euros a month and the VvE at 125 euros. I also pay 105 euros a month for electricity, 89 euros for health insurance, 38 euros for insurance for my camper and I have subscriptions to Spotify (10 euros) and Netflix (8 euros). Depending on what I earn, I also put some away every month for my pension or on my investment account. But that’s not a fixed amount every month.”

What else do you spend money on?

“Mainly on travel, groceries and fun things, like eating out with friends or a day trip. I usually keep around 500 euros for variable expenses every month. When I'm traveling, I don't necessarily spend more than I do in the Netherlands. I have more fuel costs, but otherwise the costs remain fairly similar. I often stay at free campsites and I really don’t eat out three times a week. You can make it as expensive or cheap as you want. As much as possible, I want to spend my money on things that really make me happy.”

What do you save on?

“On anything I’m not interested in: clothing, makeup, getting coffee from a coffeeshop, furnishings, subscriptions, insurance. When it comes to energy in the house, I’m also super frugal; I take quick showers and rarely turn on the heating. But I would never sacrifice my quality of life to save money. You don’t have to, it’s up to you. You just need a lot less than you think. I noticed that again during my travels in the past few months. I didn’t have much with me, but I didn’t miss a thing.”

Are you making arrangements for your old age?

“Yes, for a number of years now I have had my annual margin invested by a pension provider for entrepreneurs. I have been working on it a lot lately, but not so much that I am putting in a fixed amount every month. I believe I have deposited 7,000 euros in two years so far. I put it off for a long time before, thinking I'd start putting in more when I was earning more. But instead of putting it into my retirement pot, I would spend it. It didn't feel right that I hadn’t accrued anything yet, so now I’m catching up in a big way. I don’t want to be poor when I get older. I want to live well and enjoy life, now and in the future. One doesn’t have to preclude the other.”

Do you see any improvement points with respect to your pension?

“I’m not where I want to be yet, I plan to put in more in the near future. But I think I’m on the right track and things will work out. Including the state pension, I’ll probably end up with around 2000 euros a month, and by that time I’ll have paid off my house, so I’ll be able to make ends meet.”

How do you picture your life by then?

“I would like to be on Gran Canaria or something, living the good life. Eating out a lot, doing things; anything but sitting at home and getting a cup of coffee at the snack bar once a week.”

Does money make you happy?

“Yes, especially because of the freedom it gives you. But it is a means, not an end in itself. Because I got my finances in order and rearranged my life, I don’t have to worry about money. As a result, I was able to escape the winter with my dog and experience the last chapter of his life with him in a special way. This would not have been possible if I had been penniless.”

Netspar director Marike Knoef strives for more pension knowledge

Drop the word “pension” and Marike Knoef will get genuinely excited. An unusual reaction in a country where most people seem to feel more emotion at the word “brick”. But that enthusiasm is the ideal attitude for Netspar’s general manager, whose mission is to convince the nation that retirement is definitely not a “we’ll think about it later” thing. More retirement literacy is what she aims for. “Because more than half of people are worried about their retirement.”

Is saving for later by definition a good idea? It depends, as Marike Knoef (39) discovered when she moved from her parents’ house in Lochem, Gelderland, to a student room in Tilburg. When she was clearing out the cupboards, she found a stack of origami sheets. Expensive paper, which she used to love folding into origami animals as a six-year-old. But now it dawned on her that she had saved three quarters of them “for later” and now she realizes that she would have been much better off enjoying them at the time. You can also put too much aside, she concluded. She likes to use those Japanese folding sheets as a metaphor when talking about retirement. She also did this in her inaugural speech when she was appointed as professor of empirical microeconomics. She also helped people visualize the differences between pension incomes by handing out a smaller or larger origami paper to everyone present.

Netspar

The key question for her, however, is: how do you distribute your financial resources in such a way that you benefit from them in all phases of life? “That is a challenging question. And one in which various scientific disciplines come together. There are the financial, economic and psychological sides, the work and health aspects - how long can you work? - and the communication about it also plays a role. That’s what makes it so fun and interesting for me.” Which is why she feels like a fish in water at Netspar, an independent think tank and research and knowledge network on pensions, of which she has been the general manager since 2020.

As director of Netspar, you are striving for more "pension literacy”. Why is that so important?

“Research done by Netspar shows that most people know very little about pensions. At the same time, over half are very concerned about it. Even so, for a large proportion of them, their pensions are in order. The only thing is, they’re not aware of it. If people gain a little more basic knowledge, you notice that their worries subside. Of course, you don’t need to know everything under the hood. But 40 percent of young people think that there will be no pension for them later. That really is a lot! If they knew a bit more about it, they could feel more at ease.”

But how do you get them interested?

“We also do research on that. How do you activate people, how do you improve communication? On the one hand, you want to reduce the worries that many people have. On the other hand, you want to inform them about their situation personally. We ourselves communicate little with 'the public'. Once in a while we hold a public event for all Dutch people, for example around the elections. And occasionally we organize information events for interest groups. With our research, we ensure that a debate can be held based on facts, rather than on 'gut feelings’. That is why it is important that our stakeholders - all the agencies involved in pensions - receive the information.”

So, who should inform the public? Is that the pension funds’ responsibility?

“The entire pension sector benefits if people know more about pensions. But it’s a shared responsibility; I also see a role for the government here. At the Ministry of Social Affairs and Employment, they’re working on a major campaign. For example, many people don’t even know that Mijnpensioenoverzicht.nl exists. I also noticed once again how low pension literacy is when I tested the questions for a new survey in my surroundings in advance. Both they and the representative group of Dutch people who took part in the survey turned out to have an even lower level of knowledge than I had expected. That was a bit of a shock to me.”

Spread the word, in other words. The Pension Federation now provides information to secondary school students. You yourself have visited elementary schools?

“This was an initiative of Leiden University, the Meet-the-Professor project. Professors visit grade 7 and talk about their field of study. I tell them a bit about pensions. When I drop the word, you see students thinking: oh... pension. But then I ask if they have ever collected anything. And was that too much or too little? They recognize that. They mention marbles, stickers. Nail polish, someone said. That’s how they get really interested: how have we set up that pension, how does it work? So perhaps you first need to get people over the threshold. The new pension system could be a good opportunity to make them more aware of the issue.”

That new pension system will, in principle, go into effect no later than January 1, 2027. What do you think its strengths are?

“You are really never done creating a pension system; it is a continuous process because the world is continuously changing. But I do think the new system is an improvement. There is more customization per age group, which better suits people’s situations. The old and the new pension systems are both sensitive to developments on the financial markets. However, the new system does offer better ways of dealing with this, through a more targeted allocation of financial risks. In the future, pensions will move more rapidly, in line with the financial markets. Young people may be exposed to more risk than older people. The new system will not necessarily be less complicated. But it will be more transparent, because everyone will be able to see what assets have been accrued for them. That transparency can help dispel some of the concerns young people have.”

The new pension system is also more uncertain. Benefits may start to rise or fall annually, depending on the financial markets.

“That’s a point I do worry about. Because we see that if pensions are cut or not indexed, this triggers emotional reactions. Losses hit twice as hard as gains, even if the total benefit increases over the years. Therefore, if this happens with spikes and drops, the perception of the pension can be much worse than it needs to be. Of course, there is some thought about whether you can spread out spikes and drops over time. That has advantages and disadvantages. Viewed purely from the perspective of people’s emotions, it would be best to take a major negative shock relatively quickly. So that you are not confronted with a spread-out loss for years on end, which becomes increasingly difficult to explain. Whereas from that perspective, it would be better to spread a major positive shock over multiple years, to create a cushion for future losses.”

Pension funds also determine the investment risk for the various age groups.

“The new Pensions Act (which is still being debated - ed.) therefore states that the risk attitude of participants must be measured every five years. How much risk are they willing and able to take? This naturally raises questions: how do you measure both people’s preference and their risk capacity? And how do you explain this in a comprehensible way? What does someone need to know to be able to answer that? After all, the balance between risk and return is an important decision.”

Netspar is now doing research on that risk appetite?

“A study is underway with APG at the pension fund for the construction industry. We are investigating whether we can make risk measurement more attractive by converting a boring scientific survey into a serious game. We’ll compare the results with those of a regular survey using three different measurement methods.”

Can you say anything yet about the outcomes?

“We have just shared the first results with the bpfBOUW board. We see the same patterns across the different survey methods for the difference in risk appetite by age, by high and low incomes, and by background - whether they are employees in the workshop or in the office. But the level of risk appetite does differ by method. That, too, raises questions: how should we deal with that?”

But the participants were willing to take risks anyway?

“Yes. Look, if you ask people on the street, they would say: preferably as much security as possible. They don’t like financial uncertainty. They prefer to opt for a fixed rather than a variable payment. Even if that rationale doesn’t necessarily give them the best results.

We have also conducted research into this: for most people, it really is better to take some risk. That increases the chance of a higher payout. Because security is expensive.”

The younger you are, the greater the risk appetite?

“That is indeed confirmed in our studies. We also see that in the international literature.”

But ultimately, fund directors make the choice.

“They determine how they are going to interpret their investment policy. They can make use of our research results in making that choice. Moreover, it is a good thing that participants’ risk appetites are measured every five years. You can’t just ignore the results. It is also an instant communication opportunity. If you explain the balance between risk and return in an accessible way, it can create mutual understanding. Incidentally, we see from the surveys that the composition of the board - how many men, women, young people, older people - also affects how much risk is taken.”

So, if there are three female thirty-somethings on the board...

“... you have a different outcome than if it were three men in their fifties. And that’s actually kind of insane, because you want the risk appetite to depend on the composition of a fund.”

Netspar also examines the risk capacity of participants?

“Yes, it does. The great thing is that Statistics Netherlands has a lot of data on the assets that people have, their second-pillar pension entitlements with various funds or insurers, their savings and real estate assets. This enables us to gain insight into the overall picture at an individual level - anonymously, of course. And what that looks like, for example, by sector, age and income bracket. The various sectors will also be able to use the research results in their choices later on.”

Unfortunately, some sectors will continue to be left out of the pension equation even in the new system.

“Yes, the self-employed for example. Particularly among middle-income earners, little pension is accrued. People with flexible contracts and employees in small companies, the SMEs, also accrue relatively little if anything at all.”

What do Netspar studies tell us about that?

“That one of the barriers again is a low level of knowledge about pensions. They don’t really know how it works. Only 50 percent of self-employed people are aware that there is a fiscal annual margin, several surveys show. You can save for a pension in a tax-friendly way, but many people don’t know about it or think it’s too complicated. On top of that, self-employed people more often have a variable income. They do want to save, but not in a pension product where they can no longer access their money if things go badly one year. That’s a difficult hurdle to overcome. After all, you don’t want people to be able to just take it out: then there will be no pension left later in life.”

You yourself have two part-time jobs: you are director of Netspar and professor of empirical microeconomics at Leiden University. What drives you?

“What drives me is a better old age for the Netherlands. That is also Netspar’s mission. It is important to gather both knowledge and know-how - people from science and practice in various disciplines - who will work together to achieve that mission. We obtain knowledge through research projects that are prioritized by Netspar’s partners. We share that information with various target groups, on three levels: quick up-to-date, practical application and in-depth knowledge. Quick up-to-date, for example, is just one page with the most important conclusions and policy indications. Or a low-threshold podcast.”

Is this being gratefully used?

“APG is one of our partners, and we work closely with several APG departments that do research themselves. But it seems to me, with other partners too, that we can reach even more employees with our research results. Because the insights are useful and relevant to everyone. That’s why we try to distribute our knowledge in the most accessible way possible. For example, through websites, social media, newsletters and so on.”

And network development is Netspar’s second goal?

“That is very important. Various stakeholders are involved in our network: pension funds, insurers, social partners, regulators, scientists, the government. We try to expand that network as much as possible. After all, all these types of organizations have their own role to play in pensions. We hear from each other what’s going on and tackle things together. And we share our knowledge. Before I was the director of Netspar, I did my own research: what exactly are the pension issues and are the research results relevant for practice, what is needed? As director, I can do that a bit more broadly, by connecting people with each other.”

In short: sharing and connecting; that’s your mission?

“Well, I also like to surprise people positively with science. Recently I gave a presentation and afterwards someone said to me, ‘Wow, I thought: Netspar, that’s probably going to be very difficult.’ But it was very interesting and relevant. And I got new ideas.’ That aha moment people have, when they understand the world a little better, and that this makes them feel good, that makes me happy. That is also what drives me.”

Was everything better in the past, or does “now” also have its advantages? Different generations discuss social themes on the basis of propositions. This time, Karin van der Hulst (61) and her daughter Lotte Korpershoek (30). 

Lotte about herself: “I’m basically the rebel of the family; I do what I want. For example, I recently had my entire neck tattooed. Many people think that's intense, but I like it. Although my appearance might suggest otherwise, inside I am a soft-boiled egg. I work in home care three days a week and I am the mother of my 6-year-old daughter Saar.” 

Karin about her daughter: “It bothers me sometimes when she gets another tattoo - as a parent you think, is this what you really want to do? But on the other hand, it suits her and she can take anything. Besides, I used to be like that myself. I had a very short haircut and got my ears pierced, and my parents didn’t like that at all. Lot and I are very much alike. We have an incredible bond because of that. She lives in the same town and works just down the street, so we see each other almost every day. I admire Lot’s warmth and spontaneity. She always has an eye for what others need.”  

Karin about herself: “I am married to Peter and we have four children and seven grandchildren together. For many years I worked in childcare at a swimming pool, but when it closed during Covid, I decided to take early retirement. I figured I’d worked enough.” 

Lotte about her mother: “My mother is very sweet to me, and she is always there for me. We only need half a word to understand each other. It’s true that we are quite similar. Unfortunately, we also share our worst trait: we have zero patience.” 

Proposition: A good life is attainable for anyone in the Netherlands 

Lotte: “Yes, I agree with that. If you really want it, it is possible.” 

Karin: “The social safety net is generous. Maybe even a little too much. I think that some people abuse it sometimes. One of my daughters is a single mother with four children, but she works almost full time to make ends meet, while in her street there are many people sitting at home all day, doing nothing. I see cars parked outside their doors and I think: how is that possible? That bothers me sometimes.” 

Lotte: “Yes, I notice that too. Especially the slightly older generation, who benefit from a certain favorable scheme that they would lose if they went back to work. I don’t think that’s fair. I don’t understand why they don’t check it more carefully.” 

Proposition: Technological progress is inherently good  

Lotte: “In this day and age, when we are all so busy, we hardly know how to live without technological advances. I am already happy that there is a delayed start on my washing machine, for example, so that I can time it so the laundry is ready exactly when I get home from work.” 

Karin: “It’s all a bit much for me at times. I sometimes long for the old days, without all those technological gadgets. Everyone is on their phone all the time, children are often gaming on their iPads. Go outside, I think. It’s nice to have a washing machine, but I don’t use the dryer. I prefer to hang my laundry outside on the line, that makes me happy. All these things have been invented and we can’t go back. I sometimes regret that. Doing the dishes used to be quite an event. We did it together, we sang at the top of our lungs and had good conversations, so special. Those were good times.” 

Lotte, laughing: “Well, we were not all that excited about doing the dishes. But seriously: you did take the time to really listen to each other back then.” 

Proposition: People used to watch out for each other more 

Lotte: “For us, when I talk about our family, that doesn't apply. We look out for each other and for others a lot. But I do notice that outside of that, it’s not so much like that. To give an example: when I see someone eating, I always say ‘Bon appetit’. But when we were walking in the city the other day and I did that, the person I said that to just about fell off his chair in surprise.” 

Karin: “But we just keep doing that anyway. I have noticed that, especially since Covid, people live more in their own little world. That worries me.” 

Lotte: “I think, in any case, people could be a little more considerate of each other. The world would be a much better place for it.”  

Proposition: You have to be so careful when you say anything these days 

Karin: “Yes, at least it is said more often that you should not say something. People take everything personally and many subjects are sensitive. Sometimes you don’t mean anything wrong, but it is misunderstood. I think tolerance is hard to find.” 

Lotte: “Yes, you think extra about everything: is it okay to say this? Is it okay to do this? For example, my daughter will soon be having an event at school, with the theme ‘come as what you want to be’. She wants to wear an army outfit, but I find that a bit sensitive, with the war in Ukraine. That kind of thing.” 

Proposition: We are very prudish nowadays 

Karin: “When I look at today’s video clips, they don’t look prudish to me. I was not very prudish myself, even though I was raised that way.” 

Lotte: “You didn’t raise us to be prudish either.” 

Karin: “Well, I seem to remember that we had no problem with nudity, and you were the one that had a problem with us wanting to put a new glass shower door in the bathroom.” 

Lotte: “Hmm, I don’t know where I get that from, but I’m always conscious of what I want to show or not show. That is also how I am raising my daughter. I don’t mind if she makes videos for TikTok, but only fully dressed and she always has to show them to me first. Decency is important to me. Especially since I became a mom, public nudity seems to bother me more. I would never lie down topless on the beach, for example. I don’t consider that decent.” 

Proposition: The gap between the rich and the poor keeps getting bigger  

Lotte: “Absolutely. They should take more money from the rich. If you have a lot, you can afford to give more, I’d say.” 

Karin: “Then again, I find the discussion about taxing home ownership a tricky one. My husband and I have almost paid off our mortgage and have worked hard for years to do so. It wouldn’t feel fair to us if we were suddenly taxed more. But, on the other hand, it’s not fair for our youngest daughter to pay 2000 euros a month in rent and not be able to buy. I think that is really awful.” 

Lotte: “I have a good life. But it is getting more and more expensive. It’s practically impossible to live on one income as parents, nowadays. You both have to work, or you won’t be able to make ends meet. We basically spend an entire month’s wages on basic expenses like mortgage and utilities, and we don’t even have that big a mortgage.” 

Karin: “I had the luxury of being able to stay home when the kids were little. Once they were all in school, I went back to work. I’m noticing that we are often asked to babysit the grandchildren now. I love doing it and I love them, of course, but sometimes I think: my husband and I want to do things for ourselves too, now that we have reached this age. These days, there is a lot of pressure on grandparents because the parents work so much. And I see a lot of grandparents at the school, picking up the kids. I don’t think we are meant to be the ones raising the grandchildren.” 

Proposition: Kids these days, they will never amount to anything 

Karin: “I think every generation lumps the young people together. Our parents said the same thing: those kids will never amount to anything. And although you think you’ll never say that yourself, you end up doing it anyway. You are still inclined to think that it was better in your time. But I don’t really believe that today’s youth is so hopeless.” 

Lotte: “There are always a few bad apples; that’s just the way it is. But if I encounter a nuisance from a group of young people, for example, then I try to talk to them, in a positive way. To get them to change their minds. For example: hey, I understand that you are here and you’re having a good time, but would you mind toning it down a bit? Then the problem is solved. Everyone should have a place to develop themselves, especially young people.” 

Karin: “Lotte also went through a phase where she was hanging around the mall with a group of friends. I would hear about that from other people.” 

Lotte: “It was just fun.” 

Karin: “Other people didn’t like it. They’d say to me: I’d drag her out of there by the hair. But I knew: she’ll probably be into something else again in a couple of weeks. She was searching. I think we should put ourselves in their shoes more. If we all do that and we are all a little more considerate of each other, everything will be fine.” 

Proposition: Everything was better in the past 

Lotte: “I was a lot more relaxed when I was a child. Now I constantly have this sense of agitation and I experience quite a bit of stress. We used to communicate very differently and we used to enjoy playing outside. Yes, my experience is that things were better in the past.” 

Karin: “I think so too. We lived in a “woonerf” (living street); you don’t see those anymore either. The whole neighborhood played together, the children were always outside. In the neighborhood where we live now, hardly anyone watches out for each other. I don’t even know who our neighbors across the street are. That really bothers me. More and more municipalities are merging, which means that the village feeling of everyone knows everyone is disappearing. It is all becoming so impersonal.” 

Current issues related to economics, (responsible) investment, pensions and income: every week an APG expert gives a clear answer to the question of the week. This time: Jan-Willem Ruisbroek, head of infrastructure investment strategy at APG, on when renewable energy can be stored for later use.

Last weekend it happened both days: the Netherlands produced more solar and wind energy than was used, weatherman Gerrit Hiemstra tweeted. The energy surplus went abroad, because storage of wind and solar energy is still difficult. This raises the question of when we will be able to start storing it.

Solar energy
“Solar energy storage is already happening,” Ruisbroek says. “For example, APG is investing in some solar parks in Nevada and California, where there is a predictable pattern of solar power generation and consumption. At the solar farm, there are a number of large batteries that store the excess energy. Such a battery is the size of a shipping container and looks like a kind of server room. During the day, energy is stored in them that people can use in the evening when they come home and the sun is no longer shining. The challenge lies in scaling up the use of these kinds of batteries. They are still relatively expensive, but they are rapidly becoming cheaper. In about five to ten years, they may be so cheap that you can put a small version in your garage. Then the excess energy generated by your solar panels will not be fed back into the grid, but can be stored in your own battery. That consumer product is going to come anyway. At present, there is a huge hype about solar panels, and in five or ten years' time there will be a hype about batteries. So, we can already store solar energy, but it is not yet being done on a large scale and the costs are still relatively high.”

Wind energy
It will also be possible to store wind energy within about five years, Ruisbroek expects. “But it is likely that with wind this will be in the form of large-scale hydrogen projects. Large offshore wind farms are being built now. These consist of gigantic turbines, about as tall as the Eiffel Tower. They produce an enormous amount of energy. When that comes ashore, it has to be stored when there is an excess of energy. And wind is a very good source for turning water into hydrogen, which can store energy and be released as energy again after combustion. Shell and Gasunie are currently building a hydrogen power station in Groningen. It will use energy from wind turbines to produce hydrogen. This is done on an industrial scale and, unlike a battery for solar energy, is not suitable for private use. The big challenge for hydrogen is that there is not yet a large infrastructure for transporting it, although the existing pipelines for natural gas may be a solution.” 

Last weekend, the Netherlands had more than enough generated solar and wind energy. The question is whether that is the rule or the exception. “It didn’t surprise me that the days with excess energy were on the weekend, because a lot of industry is closed then so demand is lower. A lot of solar and wind farms still need to be built to meet the total demand for energy. Currently, only a small percentage of the total energy supply consists of renewable energy. In addition to the development of battery technology, many more wind turbines and solar parks will have to be built in the Netherlands. There are presently a number of large offshore wind farms that supply some 4 gigawatts of energy. By 2030, an additional 20 gigawatts will be generated and by 2050 the total should be 70 gigawatts. There are plans to build more as quickly as possible, but these are also needed to meet demand. Because a great deal of energy is needed.”

European network
In addition to investments in battery technology and hydrogen power plants, a lot of money is currently being invested in so-called interconnectors. These are connections between countries through which excess sustainable energy is transported to neighboring countries. “The Netherlands has these connections with England and the Scandinavian countries, among others. In order to ensure that the surplus of energy generated in Europe arrives at the place where there is a demand for it, many connections are needed between the national high-voltage networks. There is already a European network in place, which enabled the Netherlands to export its energy surplus last weekend, but it is now being further expanded.”

Larger scale
The storage of solar energy in a battery is already possible on a small scale, as the solar parks in America show. According to Ruisbroek, it is now mainly a question of applying it on a larger scale, so that the batteries become cheaper and eventually also affordable for private individuals. Conversion of wind energy into hydrogen for storage purposes, on the other hand, is still in the start-up phase. “For now, that is a matter of making it work in practice before it can be rolled out further. So actually, the development towards storing wind energy is a step behind the development towards storing solar energy.”

APG board chair Annette Mosman is among the 30 most inclusive leaders of 2022. So says MT/Sprout, a platform focused on entrepreneurship and leadership. The “Inclusive30” is a list of thirty people “who make a proven contribution to inclusion and diversity in the Dutch business community.”

Leaders who make a difference by setting a good example, making concrete progress and actively spreading the importance of diversity and inclusion (D&I). That is what MT/Sprout set out to find for the Inclusive30.

Tackling inequality

The platform calls APG “an organization that is setting an example by eradicating gender pay inequality in the same positions.” Mosman appears to have come into the picture for the Inclusive30 in part because, having closed the pay gap in one fell swoop in 2019, APG is now tackling inequality structurally. To do so, the company has been looking into the causes of the career paths among women being less steep on average. At APG, there is still work to be done; mainly in the management layer immediately below the board of directors. At that level, women make up 26 percent of the total number of managers. At the board level (50 percent women) and in the supervisory board (60 percent women), APG already has the appropriate ratio.

MT/Sprout notes that things are going in the right direction at the supervisory board level in the Dutch business community. But less progress has been made at the executive board level - certainly where unlisted companies are concerned.

That progress is achieved by embracing differences, among other things, Mosman says. “Diversity and inclusion are great; they enrich you and your organization. Start small, then you will ultimately achieve big changes. And thirdly: create policy, but most of all, be inclusive in the day-to-day contact.”

“Crystal clear”

There is no lack of “attention” for diversity and inclusion (D&I) in the Netherlands. In the business world you won’t easily find people who are against it, at least not openly. Even according to MT/Sprout, the “usefulness and necessity of inclusiveness are crystal clear”. And in the same breath, they add that achieving tangible progress is “another matter”. All the more reason to use it as a criterion for the Inclusive30.  

Current issues related to economics, (responsible) investment, pensions and income: every week an APG expert gives a clear answer to the question of the week. This time: Peter Verbaken, Head of APG's Commodities Team, talks about the consequences of a boycott of Russian energy.

A gas and oil boycott is not part of the latest sanctions package against Russia, but it is a measure the EU is holding in reserve. According to a report by the Netherlands Bureau for Economic Policy Analysis, the Netherlands will be hit hard if Brussels imposes such a ban. Should we therefore be afraid of such a boycott? Or will the consequences not be as bad as expected, as professor of economics Sweder van Wijnbergen argues in de Volkskrant?

First of all, Verbaken says that the situation in Ukraine affects him. “It is terrible to see how the people of Ukraine are suffering from the violence of war and how the country seems to be slowly being devastated. I've been following it closely from the start, also partly because of the impact it has on my work, and I sincerely hope it ends soon."

Coal as an alternative
Because of Europe’s heavy dependence on Russian gas, a gas boycott will hit harder than an oil boycott, Verbaken argues. “In the Netherlands, we have been lucky with a mild winter. At the end of last year, even before the Russian invasion of Ukraine, there was already a huge increase in the price of gas because stocks were so low. The mild winter and an increase in Russian gas supplies enabled us to get through the winter. But now we need to replenish gas supplies in the summer. If a ban on Russian gas imports does not allow us to replenish stocks in time, an alternative plan will be needed. Van Wijnbergen mentions the use of coal as a solution. In theory, that is indeed possible, although it is, of course, contrary to current climate policy. But it cannot be ruled out that politicians might nevertheless decide to switch from gas to coal in this exceptional situation.”

The question is whether coal can make up for the loss of Russian gas. Verbaken does not think so. “In practice it will turn out that you also have to do something on the demand side. For example, there is already a government campaign called ‘Turn the Switch’, which aims to get households to turn the thermostat a degree lower. However, a third of the gas demand in the Netherlands comes from industry. In order to reduce this demand, it cannot be ruled out that large industrial gas consumers will be forced to use less gas. This is certainly conceivable if Dutch gas reserves are not to be topped up with Russian gas this summer. However, forcing industry to use less gas is a radical measure of the kind we haven't seen since the 1970s, with the oil crisis and car-free Sundays.”

Oil shortage
In the case of oil, it is a slightly different story. Should the EU no longer import oil from Russia, then China and India will buy up the Russian oil at steep discounts, Van Wijnbergen expects. As a result, both Asian powers will need to import less non-Russian oil from the world market and therefore there will be no oil shortage. In theory, Van Wijnbergen has a point, but in practice things may turn out more difficult, Verbaken believes. “It will certainly take Europe several months to switch from Russia to other oil suppliers. In addition, the West is putting pressure on China and India not to play Russia’s savior, especially after the latest news about the many civilian deaths in Ukraine. What also comes into play are the so-called letters of credit, the financing required to ship oil. Financial parties will be very cautious about issuing them due to the threat of sanctions and public opinion.” It therefore seems unlikely in the short term that an oil shortage can be avoided by China and India importing more Russian oil, leaving more non-Russian oil for the EU countries.    

Major interventions
Verbaken thinks that Van Wijnbergen’s view is a bit on the optimistic side when it comes to the consequences of the removal of Russian energy. “Among other things, he is missing the factors that make shifting oil flows complex, and that gas demand really needs to come down.” Most problematic remains the boycott of gas. “The elimination of Russian gas punches a hole in our supply. If it can't be replenished in the summer, the problem will become more and more critical,” Verbaken says. “It’s like driving towards a cliff. The gas supply can only be sufficiently replenished if sufficient coal-fired power stations can be started up, the demand for gas can be reduced, and the supply of LNG (liquefied natural gas) can be tapped here and there. At the moment all that is being asked of the population is to use gas more sparingly, but what if that proves insufficient? How far do you have to go to force industries to use less gas? And which industries do you start with? The crux of this situation is that the government cannot explain to the population that they will not be able to heat their homes next winter. Major interventions are needed to prevent that from happening. The concerns about the impact of a boycott of Russian gas and oil are therefore certainly justified as far as I am concerned. However, given the current situation, with all the suffering that Moscow causes, it would be a perfectly justifiable sanction against Russia. If it is actually implemented, the government, industry and the Dutch population will have to work hard together to minimize its impact on us.”   

Was everything better in the past, or does 'now' also have its advantages? Different generations discuss social themes on the basis of statements. This time, Angela Ursem (49) and her father Claus (75).

Claus about himself: "I have three children and seven grandchildren. I have been working for Bouwbedrijf Ursem for about fifty years, a company that my father once started and that I and my eight brothers managed to bring to great heights. Unfortunately, it collapsed during the crisis. I'm now retired."

Angela about her father: "My father is very driven, he's always busy developing things and making things better for others. I also think he's very warm and sociable, he's always friendly and never loses sight of the needs of others. I think that's a nice characteristic trait. He's now enjoying his camper van in Portugal, but I know him as someone who's constantly on the go. He now finally is able to sit down and do nothing for a bit."

Angela about herself: "I was born and raised in Wognum, a village in North Holland, my parents still live there. I was the middle child. I now live in Amsterdam with my husband and two teenagers. Over the past ten years, I've worked as an interim marketing manager for many large corporations. Three years ago, I started a skincare company, Food for Skin, with my older sister, born from the urge to make the cosmetics world more sustainable. My sister has been a beautician for thirty years, I contribute all the marketing and commercial knowledge."

Claus about his daughter: "Angela was very independent from her early childhood. She is a woman who's doing well, she's very social, can be businesslike and also stands up for others. She is a precious daughter to us."

Statement: People used to look after each other more

Claus: "You know, in the past, you could hardly help but look after each other. I come from a big family; everyone had to chip in. In our village everyone was equal, there were no big differences in income or they didn't seem to exist. You helped each other, there was great solidarity. With today's possibilities, looking after each other seems to disappear. But on the other hand, people are still there for each other when needed."

Angela: "Something has definitely shifted, we've become much more individual. Not that we don't care about others or don't want to show solidarity, but life is a rush, a lot is expected and demanded of you, leaving less room for others. But as my father says: when the need arises, people are really willing to help each other. Fortunately, that basis is still there."

Statement: In the Netherlands, we're lagging in terms of women's emancipation

Angela: "I think that in the Netherlands, we're much further ahead in terms of women's emancipation than many other countries, but we're not quite there yet. Just look at that campaign recently, about how there are more CEOs in the Netherlands named Peter than there are female directors. Equality is important for everyone, not just women. Fortunately, I've never had any trouble proving myself. I stand my ground."

Claus: "I also think women's emancipation is important, women should be given the same opportunities as men. Yet I also thought to myself a few times: is it about the best person in the right place, or does it have to be a woman? I'm not always sure whether good choices are made in that regard. That said, there should be no discrimination in pay."

Statement: You have to be so careful with what you say these days

Claus: "Well, judging by the language they use in the House of Representatives, we don't have to be that careful. But more attention is paid to what you say and how you say it. That's important too. As long as you treat each other respectfully, I think you can say a lot."

Angela: "I think freedom of expression is a great and important asset. But that does not absolve us of our duty to take other people's sensitivities into account. Freedom of expression is not a license to offend people from other cultures or backgrounds. I think it's very important to be aware of who you are talking to and how it comes across. If something is sensitive, try to find out what's behind it: why does someone take it personally, and how can I do it better? I think it's enriching for everyone to continue to develop in this area."

Statement: We're very prudish these days

Claus: "Well, in my day we were more prudish. When someone was washing himself in the kitchen, my mother would put a tea towel over the radio so 'the man in the radio' couldn't see you. The first naked woman on TV, Phil Bloom in 1967, was quite an event. At home we were bound to the church, nothing was allowed there. At age 12, we didn't know where children came from."

Angela: "I'm glad we can now freely talk about sexuality. The average magazine writes about it quite explicitly. That's fine with me, it shouldn't be something mysterious, like when my father was young. Sex is also discussed much more openly in schools. In that sense, I think we are less prudish now."

Statement: The gap between rich and poor will only widen

Angela: "I'm afraid so, looking at how society is developing. The number of rich people is increasing, and so is the number of poor people. Yet there are initiatives, also from the rich, to close this gap. Hopefully, that movement will be big enough to really make a difference. This is also necessary to prevent many problems in the long term."

Claus: "In my time, there was poverty everywhere. In the village where I lived, almost everyone was equal, with the exception of a few dignitaries who we felt were wealthy. We all felt pretty poor, but didn't really mind because everyone was the same. I come from a family of twelve and the trousers of the first one lasted twelve children. That's completely different now. I also think that the gap is getting far too big, something definitely needs to be done about that. Some of the big earners should lead by example, by using their large assets for charities. But it remains difficult to achieve."

Statement: Everyone in the Netherlands can have a good life

Claus: "What is a good life? The most important thing is that you're healthy and happy and that you can get by. I don't know if that's feasible for everyone. Basically it is, but there will always be people who, for whatever reason, can barely scratch a living."

Angela: "In theory, it's possible for everyone to have a roof over their heads and buy food but in practices we see plenty of examples of this not being the case. It also depends a lot on your definition of a good life, as my father says. It's a combination of factors. I can imagine that if you don't have a lot of financial resources, but do have a rich social life, you still think you have a really good life. There must be a subsistence level, but that is apparently not for everyone, despite all the regulations and subsidies. I find that distressing."

Statement: Today's young people are too well off

Claus: "People often say young people are no good, but I don't agree with that at all. Young people are no different than they used to be, the circumstances are different. When I was young, everything was much clearer, we had much less temptation. Back in my day, you didn't even know drugs existed. Today's young people have known few setbacks or poverty - with a couple of exceptions. They grow up with far more opportunities than we used to have. But does that mean they're spoiled? No."

Angela: "Again, define 'good'. Most young people can go to school and have the opportunity to study. Fortunately. Financially, I think they may be better off than in the old days. On the other hand, look at what they're faced with. They've hardly had a social life for two years because of COVID, there's a climate crisis hanging over them that they have to deal with and now there's a threat of war again. For my children aged 15 and 16, this has an impact on their lives and the choices they make. They face very different challenges than my father and I had to cope with. I think that nowadays, there's more attention and care for young people, for their individual needs, also at school. There is more personal support. Is that too good? I don't think so. It's just good."

Statement: By definition, technological progress is good

Claus: "Yes, we need to constantly invent and improve new things. It makes many things easier. On the other hand, it also creates distance."

Angela: "I'm a huge proponent of technological progress, which is what we need when you look at the problems we face, such as the climate crisis and overpopulation. For that, we need behavioral change but also technology. We can't afford to stand still. I do think that with every invention we should ask ourselves: does it really bring us further, or does it bring new problems with it?"

Statement: Everything used to be better

Claus: "Ha, if you start talking like that, you're getting old. Everything used to be different, but certainly not better. Not for me anyway."

Angela: "That's beautifully said, dad. Everything was different, and everything will be different in the future. Everything is constantly evolving and it should be. You shouldn't resist it, you should embrace it."

Today, APG publishes the 2021 annual report. Naturally as a PDF, but also as a website, where you can read in detail how we as APG look back on 2021. And how we, as the country’s largest pension administrator, are preparing for an unprecedented, rigorous pension reform.

APG plays a crucial role in that transition to a new system. All funds must have switched to the new system by January 1, 2027. And some pension funds want it sooner. That's fast. Clear choices are therefore essential. APG’s CEO Annette Mosman says about this in the annual report: “The changes are so great that we have to make clear choices. The new system is the top priority. This means, among other things, thatwe will put certain projects on the back burner for a while, retrain or reskill employees, and recruit digitally trained people.” Read more about it in her foreword.

What else can you find in the report?

Who we are and what we do

As the country's largest pension administrator – we serve 8 pension funds and some 4.8 million participants – we make use of our combined strength and knowledge to build a transparent and future-proof new pension system. We are becoming an increasingly modern communications and IT company, and we strive to provide high-quality services along the way.

About APG

The best possible pension – in a livable world

On the road toward the ‘Pension of the Future’, we’ll do everything we can to achieve maximum pension value and a healthy return. Sustainability plays a central role in all our investment choices.

Our 2021 results

The importance of our culture

Our internal culture is a microcosm of the influence we have within society. To this extent, our employees’ knowledge, skills, and ways of working are critical to our success. The transition to the ‘Pension of the Future’ also requires new expertise and skills – which we are working hard to develop.

How we work together

Read the full Annual Report as a pdf here.

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? In this Week van het Geld (Week of the Money, ed.) we talk to some young people. Today we give the floor to Maud (13) who is already earning some money doing small jobs and who is an expert in spending it.

Maud van Zandwijk (13)

Income: 72 euro per month

Savings: 180 euro

Do you get an allowance?

“Yes, I get 22 euro in pocket money and an allowance of 50 euro for clothing. I can also earn some money at home performing household chores. Doing the dishes earns me 1 euro and I receive 1.50 euro taking care of the laundry. That motivates me sometimes.”

Do you have any other sources of income?

“I take on some small jobs. I ‘work’ in the cafeteria at school from time to time. My payment consists of a free sandwich which saves me a lot of money. My parents said: If you deposit the money you save on those sandwiches on a separate account, it's almost as if you really get paid. That was a good idea. I also play walk-on parts at times. That earns me about 30 to 40 euro for each part.”

Is it enough all together?

“It should be. But because it feels as if I have loads of money, I also spend it quite easily. I now literally have 73 cents in my account. Halfway through the month I thought: Hey, I have some money left. So I went to the city center and that's where things went wrong.”

What do you spend your money on?

“Mainly food and drinks. We have nice things to eat at home as well, but McDonald’s is something we don't normally have. It's possible to have meals delivered by certain food delivery services, but then the fries are usually cold. It just feels nice not having to ask for permission and are able to buy whatever I feel like. I also bought a pair of shorts for 10 euro because the weather forecast was sunny. And then I saw a cardigan a friend of mine has and I also wanted to buy it: 20 euro. And all of a sudden I ran out of money. My parents don't tell me what to do with my money, it truly is mine. But once it's gone, it's gone. I have to suffer the consequences and they usually don't help me out.”

Do you roughly get the same as your friends, or more or less?

“I get quite a lot compared to them. Most of my friends don't receive an allowance for clothing.”

Do you save?

“Yes, that was a precondition for my parents to give me my own bank card. The agreement I made with them is to set aside 10 percent of everything I earn on a separate account. I call it my ‘don't touch’ account. I am used to it now, so I don't miss that 10 percent. So, I save quite a lot unwittingly, it feels like free money. That ‘don't touch’ account now has a balance of 160 euro. My parents also have money saved for me in the late future, but I have no idea how much that is.”

Do you save money for anything specific?

“I have another pot holding 20 euro, intended for America. We go to America at the end of the summer holidays and I want to have some money by then to buy Starbucks mugs. I collect those mugs and every city has its own version. Then I will have something special.”

Do you handle your money responsibly?

“No. I have usually spent my pocket money and clothing allowance in three days’ time. When I have money, I think: Yes, spend it, right now. I keep on making the same mistake and I don't learn from it.”

What do you want to be when you are older?

“I always wanted to become an editor, but I never do it anymore so I don't think that's what I still want. Maybe I can do some more walk-on parts or anything social or in the hospitality industry or something like that. I did some voluntary work in a cinema once with my mother and I truly enjoyed doing that.”

Do you care about the amount of money you will be earning later on?

“Yes, it's important to earn a good salary because I don't want to end up being homeless. It would be nice if I can make ends meet.”

Is money important to you?

“It usually is. You need money to buy things or if you have to pay someone back. It's rather miserable if you are unable to pay someone back. I borrow money from friends quite often when I have spent my monthly allowance and they handled their money more wisely. They usually don't mind, as long as I pay them back quickly. And I do.”

Does money bring happiness?

“Sometimes it does, sometimes it doesn't. Money gives you the freedom to buy whatever you like. If you are poor, you cannot do whatever you want and have everything your heart desires. On the other hand, it also doesn't seem great to have everything you want. What should you do with your money in that case? I also heard that people could get very lonely if they have so much money they don't have to work anymore, because their friends still have to work and never have time to meet.”

Do you worry about your financial future?
“Sometimes I do, and then I think: How will I survive if I have to do it all on my own later on? It already happens sometimes that I don't get picked for a walk-on part, and the same may be the case with a real job. If you don't get picked then, you won't be able to pay the rent. My mother already said: You move out once you turn 18. Maybe my parents and I can agree for them to pay my rent if they want to get rid of me that eagerly.”

Your pension is still miles away, what do you know about it?

“That you receive money but no longer have to work, something like that. When I think about pension, I think about old men playing golf wearing those funny hats.”

Topical issues in the field of economy, (responsible) investment, pension and income: every week, one of APG's experts provides a clear answer to this week's question.

In this edition: Sjacco Schouten, Head of Emerging Market Debt, about the consequences when a country such as Russia is no longer able to fulfil its payment obligations. “Also in an economic sense, it is a scenario with only losers.”

In the beginning of March, a number of credit rating agencies expressed the expectation that Russia would possibly no longer be able in the short term to fulfil its payment obligations (interest and redemption of the national debt) due to the Western sanctions. Russian government bonds were given a so-called ‘junk’ status, which more or less means that creditors deem it very likely that a large part of their money will not be repaid. This raises the question what happens to a country in case of such ‘bankruptcy’. In what case is this applicable? And what are the consequences?

The first question appears to be relatively easy to answer. Schouten: “The interest payment and redemption of government bonds usually takes place on pre-established dates. If a country misses such date, a grace period takes effect first during which the country is given the opportunity to still make the payment. When that doesn't happen, the country officially goes in default.”

Virtually zero

The answer to the second question – about the consequences of such default – is much more complicated as it entails quite some ifs and buts.

“When a country is officially in default, all kinds of processes are activated. A government will usually propose a restructuring to the bondholders and make agreements on ‘how to continue’. These agreements depend on the conditions of the bond and the legislation of the country where the bonds are issued. In the most extreme case, when a country is truly unwilling or unable to pay, the bondholders are possibly forced to fully write off their bonds, to virtually zero. The price will not be entirely zero, because you can never rule out for a hundred percent that some money will still be repaid at a certain time.”

Russia has not yet achieved that point. The country has not missed any payments until now. Should that be the case in the future, it will rather be due to the sanctions making payment transactions impossible or Russia's willingness to pay than its ability to fulfil the financial obligations. “Given Russia's oil revenues, the country should be more than capable to fulfil its obligations. Whether the country is also willing to do so in the long term, is a different issue. In that respect, a distinction in conditions could arise between investors who are willing to participate in restructuring and bondholders who are unwilling or unable to do as a result of the sanctions. This provides Russia with the opportunity to give ‘friendly’ countries more favorable conditions than ‘unfriendly’ countries.”

Preferential treatment

However, the pari passu principle applies to bondholders, meaning they should be treated equally. Schouten: “In principle, bondholders from a certain country cannot be given a preferential treatment. But the conditions of bonds issued under local legislation may differ from the conditions of government bonds issued under international legislation. In addition to the legislative aspect, many other factors play a role in a possible restructuring of the Russian national debt. For example, the currency in which a bond is issued - dollars or rubles. Moreover, for certain investors it is simply forbidden to still receive payments from Russia or to make payments to Russian entities. All of those factors combined make restructuring very complicated when it comes to Russia.”

Consequences

What are the consequences should Russia decide to no longer pay its bondholders?

“In that case, the country would become even more isolated and restricted in gaining access to the capital markets. In the short-term Russia is able to absorb a lot through its oil reserves and proceeds from oil and gas supplies. In broad lines, the country is still able to keep its economy running reasonably well. But in the months to come, the Russian economy is expected to shrink and the financial situation of the country will become more problematic. To what extent the country will then be able to hold back the economic contraction depends on the willingness of other countries to help Russia. That willingness cannot be excluded. Even if all Western countries - such as the US - ban Russian oil, Russia can still sell oil to other countries.”

‘Adding insult to injury’

Nevertheless, it looks like Russia will be facing a doomsday scenario in an economic sense. “In terms of food, Russia should for a large part be able to continue to be self-sufficient. But once the supply of everything the country imports stops - technology, computers, chips, and so on – large parts of the economy will come to a standstill. The average Russian will go back in time. He or she may possibly overcome the fact that a visit to McDonald’s is no longer possible, but access to technological knowledge and certain parts for instance, is of great importance to keep an economy running and developing.”

Adding insult to injury, that's what it comes down to should Russia become a defaulter. Schouten: “The sanctions are already causing damage to the economy. The population already prefers having dollars instead of rubles. In the event of a default, a major cycle is triggered after which the Russian economy is expected to end up in a deep recession with high inflation. Also in an economic sense, it is a scenario with only losers.”

More than two weeks. That's how long the war in Ukraine is ongoing. A war that almost seemed unthinkable until recently. The horrifying images are now presented to us on a daily basis. The consequences are unforeseeable but it is clear that this war has drastic humanitarian, geopolitical and economic long-term effects for the entire world.

The people in Ukraine are in need of immediate and concrete help. So what's the value of words in a situation like this? What is the benefit of these words to people who are affected directly by this war? A statement doesn't change their situation. But at the same time, APG stands amidst of society and we feel a commitment to everything that's going on. We stand for long-term income security but always from a sustainable perspective of humankind, the climate and the earth. The invasion of Ukraine by Russia is an attack on that perspective and the associated values. 

Solidarity is an important part of the foundation underlying the Dutch pension system and, with that, an important, inherent value to APG. That value has now become even more important. Our thoughts are first of all with the victims, the people in Ukraine who had to abandon their homes and the ones who are now suffering directly from the acts of war. We also think about our employees from Ukraine, Russia and Belarus who have family and friends living in that area or who are otherwise affected by this war. As an employer we will do whatever we can to give them the support, guidance and attention they deserve. I also see the emergence of the prompt solidarity we witnessed in our society and across Europe within the organization of APG. Colleagues of different nationalities want to help the victims and have established some initiatives to this end.

The Board of Directors is obviously also looking at the impact of this conflict on the customers of APG. The pension funds and participants we work for can count on the required advice and the resulting actions. The decision made by bpfBOUW,  ABP and SPW to sell their investments in Russia (less than 1 percent of the total) is one example.

Although the impact can in no way be compared with the consequences for the people who are affected directly, we are all struck by what's happening in Ukraine right now. We are stunned, concerned and our collective feeling of security has suddenly been undermined. The disappearance of the obviousness of freedom and security makes us realize just how fundamental certain values are to us. These values are currently under pressure, but the unity with which society responds also shows that we are still willing and prepared to promote those values.

Annette Mosman, chairperson of the Board of Directors of APG

Topical issues in the field of economy, (responsible) investment, pension and income: every week, one of APG's experts provides a clear answer to this week's question. In this edition: Portfolio Manager Jean-Paul Koopmans on the question whether non-fungible tokens (NFTs) are the future or are just a hype.

Paying 200K for a digital image of a monkey wearing a baseball cap and a slice of pizza in its mouth. That doesn't come as a surprise anymore to anyone involved in the world of the non-fungible tokens. In this case, the digital ownership of the image also provides access to an exclusive virtual club: the Bored Ape Yacht Club. The monkey images belong to the most expensive NFTs of the moment, in a market where a value of 44 billion dollars was traded last year. The trade in objects that only exist digitally. In short: a non-fungible token is a digital ownership certificate of an object or event. This certificate is registered in the blockchain: an enormous database distributed globally across many computers. Such token can be bought using ethereum or any other cryptocurrency on a digital marketplace, like OpenSea.

The value of an NFT is determined by the application it offers, Koopmans explains. Think about access to a virtual club or a digital piece of clothing or attribute you can use for a digital avatar in a computer game. If an NFT is not offering a specific application? “The only purpose in that case only really is to show off being the rightful owner or resell it on a trade platform.” The possibility to buy or sell it through the blockchain is something the NFT has in common with a cryptocurrency. But the comparison should stop there. A cryptocurrency first of all is a payment instrument to pay for digital transactions, for example, while an NFT is a unique registration of a good.

Speculative
“NFTs are mined. During that process, people are in the race to obtain a virtual good, such as an image of a monkey,” says Koopmans. “In the case of the Bored Ape Yacht Club, 10,000 different images were involved. These images all had unique characteristics and the rarer the characteristic, the more popular the image. But it is totally arbitrarily whether you receive an image that appears to be popular or not. And that is exactly the major disadvantage of the trade in NFTs: it is highly speculative and therefore extremely difficult to attach a value to it. This is the difference with asset management where we utilize calculations showing the approximate worth of a company. Those methods are widely accepted. Every NFT is unique, on the other hand, meaning you just have to guess how much such image is or can become worth. New collections of these tokens are constantly issued and 99 percent thereof is worthless. That is why I absolutely consider this a hype. The same as baseball cards and stamps were a hype once.”

However, Koopmans sees a real future for the NFTs. “The activities of a notary in the Netherlands can be fully digitalized in a blockchain. The title deed of an apartment will in that case become an NFT. That can have major consequences for home ownership. It is difficult to divide a title deed into multiple smaller deeds at the moment going to a notary. An NFT makes it easy to split a house, for instance, among multiple owners. The monthly rental income is then distributed amongst them through the blockchain. That saves on notary costs and makes it possible to make very illiquid assets liquid. A house of 500K, for example, can be distributed among 100 NFTs with a value of 5000 euros each. To me, that would be a great, neat application of NFTs. But for the time being, an NFT has no judicial base and the notary's signature does.”

Blockchain
However, the question is whether trading an NFT is safe. “If a name or address on the title deed is incorrect, you can call the notary who can very easily correct the mistake. But the blockchain has no help desk or insurance. That means if you accidentally sent the NFT of your expensive image of a monkey to the wrong digital wallet, you lost it. A mistake is severely punished. And that's not just theoretical. A few days ago OpenSea was confronted with a hack, making it possible to send the monkey images from one account to another by means of a phishing mail. Even OpenSea is unable to reverse that because everything on the blockchain is immutable or unchangeable. In other words: the technology is robust but there's no room for error on the side of the user. Blockchain can however be considered as more open.” That open nature lies in the fact that NFTs can be traded day and night, and that there are no rules yet restricting the trade.

The lack of a judicial base and the safety risks are what stops an institutional investor, such as APG, from investing in NFTs. “Before authorization is given by De Nederlandsche Bank or the Netherlands Authority for the Financial Markets to invest in such instruments, quite a few hoops still have to be jumped through,” says Koopmans. “In order to make it widely applicable, a lot of research still has to be conducted. We are clearly in an experimental phase right now. The progress may be accelerated once the digital euro is introduced. It also stands or falls with the question whether or not it is backed by a community. But that community will only arise if NFTs can be applied in a practical way. I am an investor myself, so an application to me would be the development of cash flow from such digital ownership. This means, for example, music samples or news photos of which the NFTs can be traded.”

Van Gogh
Something similar is already happening in the world of digital art that clearly takes the lead when it comes to digital ownership. “It opens many opportunities for artists to gain more grip on what is happening to their creations, as an NFT allows for a transaction to return a part of the selling price to the artist. When Van Gogh sold a piece of art, he would only receive an amount once and some name recognition at best. NFT makes it possible for an artist to earn, for instance, 5 percent of the transaction amount each time, thus leading to cash flow from art. The same applies if you sell the digital ownership to a song. Everyone using the song has to pay a certain amount that ends up with the owner of the song and the artist. That's how you can exclude record companies.”

Current issues related to economics, (responsible) investment, pensions and income: every week an APG expert gives a clear answer to the question of the week. This time: Chief economist Thijs Knaap on whether the economic outlook should be adjusted now that it seems that Covid will be with us for the foreseeable future.

Just under two years after the Covid outbreak, the Netherlands is again in lockdown due to increasing infection rates. At the same time, reports are coming in from southern Africa of a new Covid variant. At the end of 2020, we still thought that vaccines would get the virus under control, but now that hope seems to have faded. How will the new developments around Covid affect government policy, consumer confidence and financial markets? "If the government decides to stop the support, it really becomes a less positive story and an economic blow with bankruptcies and rising unemployment is inevitable," said Knaap.

Impact

When Covid first took hold, the Netherlands benefited greatly from the support measures of the Dutch government. Central banks also took action, so the impact on companies and financial markets was lower than expected. In fact, the number of bankruptcies is historically low to this day. Investors did not lose their money because companies were able to survive thanks to the support. Knaap: "Government support measures make sense in a temporary crisis, as Covid was considered to be, until recently. But understandably, there will come a point where the government may think, 'enough is enough'. After all, you can't keep companies afloat until the end of the century if their existence is no longer feasible in the new situation." So, for the economic outlook, a lot depends on what the Dutch government and other countries decide in the coming period.

The longer the lockdown remains in place, the worse it is for economic dynamism. "At the end of the day, you need people to engage in business. But who is going to open a restaurant in this day and age? The economy is getting a hit regardless. That also argues in favor of not phasing out the support measures, so that at least the existing companies don't go bankrupt," says Knaap. The advantage for the Netherlands is that it still gets money when it issues bonds. "We can continue to do that for years to come without being affected," he says. For other countries, and certainly emerging economies, the situation is more dire.

Consumers

Consumer confidence also plays a role in the economic outlook. "Economic growth occurs when companies make a profit, and they do that when they sell enough of their products to consumers. This has been difficult in the recent period due to problems with product supply. However, there was a lot of demand for products and services recently because consumers hoarded money during Covid by not being able to go to the pub or go on vacation," Knaap said. "The new lockdown still constitutes another setback for many people, with the hairdresser and theaters having to close earlier. That leads to less consumer confidence, making consumers more cautious in their spending. And that's never good for the economy."

Shock

The news of the omicron variant had already led to falling stock prices. What does that say about the prospects for the stock market? "Investors always have the previous shock still in their minds," states Knaap. That was in March 2020. But after first going down sharply, stock markets rose to record highs. It is possible that investors expect that the new outbreak will not lead to an economic crisis. Still, Knaap takes into account that it will turn out differently than last time. "The falling prices could now persist for a longer time, because we no longer see Covid as something temporary." Should we therefore adjust economic expectations? "The storyline is changing now. The previous storyline started with the pandemic after which the vaccinations followed and we expected economic recovery with rapid growth within two years." With these latest developments, that chance of rapid recovery now suddenly seems a lot further away."

The next few weeks will show whether this is a last hiccup of the virus and this will be a short lockdown. If so, there is a good chance that the positive economic expectations of a few weeks ago can be sustained. This is also due to the fact that the government can still intervene for a long time and stock prices have not fallen extraordinarily hard after the emergence of the omicron variant. Still, the new lockdown is creating uncertainty, including among consumers. The longer Covid remains among us, the more likely it is that at some point the government will stop its generous support policy, causing bankruptcies and unemployment to rise and stock markets to take a hit as well. The story is not over yet.

The second-best pension system in the world. That's what we have in the Netherlands, according to the annually published Mercer CFA Institute Global Pension Index, in which 43 countries are included. Are the other countries really performing that poorly? Every two weeks and during twenty weeks, we delve into the system of a specific country. Episode two: Italy.

Would there be a better place imaginable to spend your old age than in the country where la dolce vita was invented? Italians enjoy their pension on average for a long time: men 20.7 years and women 25.7 years. That partly has to do with a high life expectancy but is also due to the fact that Italians stop working at an average age of 64. Since 2019, the statutory pensionable age has been set to 67 for everyone. Previously, men were able to retire at the age of 65 and women, remarkably enough, already at the age of 60.

The sky is the limit

Until 1992, the sky was the limit in Italy. People were allowed early retirement after 35 years of work (civil servants already after 20 years and married female civil servants even after 15 years)  with continuing payment of the last-earned salary. Nowadays men must have paid contribution for 42 years and 10 months in order to claim early retirement, and women for 41 years and 10 months.

The same as in Germany, the Italians predominantly rely on pension from the first pillar for their old age. This first pillar consists of a basic old-age pension (‘vecchiaia’) and an allowance depending on people's employment record and contributions paid (‘anzianità). Recent adjustments have made the future benefits less solid. The risk of the actual allowance being lower has therefore increased. The share of the second pillar pension (accrual of pension through a pension fund related to the business sector or enterprise) in the total pension amount is very small in Italy (1 percent).

Aging of the population takes its toll

The pension expenditures put a big strain on the Italian government budget. Estimates of the Court of Audit show that a peak of 15.9 percent will be reached in 2022 of the gross domestic product. In the Netherlands, the state pensions (AOW) are slightly less than 5.4 percent of the gross domestic product (2020) and this number is expected to increase to a little over 6.5 percent in 2040. And as the largest part of the Italian pensions is funded based on turnarounds (the working population pays for the old age of the pensioners), the aging population in Italy takes a toll on the government budget in the years to come. This is due to the fact that an increasingly smaller working population has to provide for the pension of a growing group of pensioners.

In terms of ‘durability’ Italy has the lowest score in the Mercer Index of all (43) investigated countries. That's a very unattractive perspective for young people. Time will tell whether the pension pot is still sufficiently filled when it's time for them to retire.

APG starts a platform for care-related Chinese real estate together with CBC Group, the largest healthcare investor in the Chinese market. Responding to the growing demand for healthcare, among other things due to aging, CBC Healthcare Infrastructure Platform (CBC HIP) invests in care-related real estate, such as hospitals, nursing homes and medical research and production facilities.

The Chinese expenditures on healthcare will most likely double to over 1,700 billion euros by 2026. It is therefore a lucrative growth market, in which real estate plays a significant role, is the opinion of APG and CBC Group. “The care expenditures per capita in China are currently lacking compared to other developed economies,” says Dominic Doran, Director Private Real Estate Asia Pacific. “The expectation is not only for the government to attribute more funding to healthcare, but we also expect the average Chinese to starting devoting more money to care-related matters, as they will be getting greater spending power. That is a long-term trend and, as APG is a long-term investor, investments in care-related real estate are therefore well-aligned with our strategy.”

Attractive
It is also important to mention that the Chinese government has recently equated the rules for research, testing and production of drugs in the same manner as what is internationally accepted. That has made it attractive for investors to start investing in Chinese research on medical applications. Partly because of that reason, the partnership between CBC Group and APG has established the company China Life Science Infrastructure Venture (CLSIV), the first concrete result of the platform. CLSIV managed to raise more than 430 million euros in investments in an initial round. The goal is to ultimately achieve an amount of approximately 1.3 billion euros. “Medical breakthroughs deriving from research in our facilities, could be of global importance which is positive for the returns of CLSIV,” Doran says.

CLSIV is aiming in China at the development of futureproof facilities for the so-called life sciences (biomedical sciences). This sector is currently mainly big in Western regions, where know players such as Pfizer and GlaxoSmithKline have their home base. “It is difficult to name a comparable Chinese company at the moment. But we expect that companies will be established in China within the foreseeable future that will become just as widely known as the major pharmaceutical companies in the west", according to Doran. He also bases his opinion on the fact that the importance of life sciences will increase further. “Due to the aging population, but also because many people will be in need of additional care as a result of an unhealthy lifestyle. And Corona has made everything related to vaccines and medical research even more important.”

Strategic
The Chinese government considers life sciences as a strategically important sector. Beijing is therefore more than happy to make territory available to parties looking to develop biomedical facilities. A lot of territory CLSIV is to purchase, will therefore be bought from the Chinese government. The company has already purchased 1 million squares meters (equivalent to about 140 soccer fields) of terrain in Shanghai. In the future, the country wants to purchase land and develop medical facilities in other Chinese metropolises such as Beijing and Wuhan. The platform CBC HIP may even expand outside China and maybe even outside Asia in the future, even though the latter will be difficult", Doran acknowledges. “A couple of years ago, large American biomedical companies tried to gain footing in Asia, but that appeared to be difficult. I expect it will also be difficult for Asian companies to acquire market share in America and Europe.”

The collaboration between APG and CBC Group is important in order to gain footing in the recently opened Chinese care market. The Asian investor is considered an important player in China and has experience in collaborating with medical scientists and entrepreneurs. “We have established the first investment vehicle, as far as we know, with CLSIV setting foot on the Chinese care-related market,” Doran says. “Parties in need of real estate will therefore certainly be able to find us. And, of course, for the platform it is very positive to be considered a market leader in the field of territory and facilities for biomedical research.”

Read the press release.

A pop-up store that only sells sustainably produced and second-hand clothes. That is the RE.love concept, the newest store in Batavia Stad. The Fashion Outlet in Lelystad is one of the shopping malls owned by real estate owner, VIA Outlets, which developed this sustainable shopping concept together with its tenants. The aim of these stores is to start a debate about sustainability. But is that the duty of a real estate owner? How does VIA Outlets envisage this kind of discussion about sustainability?

Geert Paemen (Group Sustainability Director at VIA Outlets) explains: “We have two types of customers: storekeepers who rent retail space from us, and their customers who buy clothes. We regularly talk to the tenants about their power consumption, for example, but with RE.love we also want to start a discussion about the sustainability of the clothing itself. The pop-up store is actually an excuse to spark a debate about sustainability with the customer. For example, the sales staff working in the pop-up store has been trained to answer customers’ questions about sustainability.”

Roland Mangelmans (Senior Real Estate Portfolio Manager at APG) adds: “By opening RE.love, VIA Outlets – which we invest in on behalf of ABP and of which we are full owners – will be killing two birds with one stone. They are actively discussing sustainability with the clothing store and with the customers who come to shop there.”

Among other things, APG called for the appointment of a sustainability manager at VIA Outlets. Thanks in part to its initiatives, sustainability at VIA Outlets has rapidly gained momentum, and the company gets high ratings for sustainability standards, such as GRESB [a certification mark that evaluates real estate companies on sustainability, ed.] Opening RE.love is probably the right thing to do in the eyes of the people who come up with these standards. Did that play a part when you were setting up RE.love?
“VIA Outlets has been working on sustainability for several years, even before I was appointed. But you need time before you can achieve anything. And we feel that we have now made enough progress to communicate with the customer about this. All the company’s departments have to operate sustainably if they are to achieve the right results. This year, for instance, we achieved the highest GRESB rating possible: five stars. Take, for instance, the results of our sector: we see that more and more companies are getting high ratings, and that is good news,” says Geert.

Roland adds: “At APG, we believe it is important that the companies we invest in integrate sustainability into their business operations, in all their processes. Consultants could be used for this, but by appointing a sustainability manager, we can rest assured that there is someone who gets up in the morning to go and deal with sustainability in the company.”

So it’s easy to get these good sustainability ratings?
Geert: “No, it’s not easy to get a high rating. Our results are compared with other real estate owners. Of course, they’re working sustainability too, so we need to keep on improving if we are to maintain those high ratings. At a building level, the entire portfolio of VIA Outlets now has a BREEAM In-Use certificate. This certification mark is used to measure the sustainability performance of existing buildings. This standard is also regularly fine-tuned and anticipates legislation, which is also becoming stricter.”

Roland adds: “I can imagine that Geert does have a point about the GRESB standard. But it is a means rather than an end in itself. It’s mainly an indication that VIA Outlets is doing well compared to similar real estate owners. We demand more of our real estate investments than merely having a good GRESB rating. And VIA Outlets is already going above and beyond in terms of sustainability than what the GRESB rating measures. What’s more, with a score of 92, there is still room for growth. And that room would still be there, even if we got a rating of 100. The GRESB criteria are ramped up a bit each year. That also motivates us to keep doing our best in the field of sustainability.”

The clothing industry has not always attracted positive news reporting in recent years. Is the opening of a sustainable pop-up store part of a trend towards paying more attention to sustainability?
“It certainly is a trend, in all sectors. A few years ago, the fashion industry realized that it ought to be concerning itself with sustainability. When, as a company, you start looking at sustainability, the first place you consider is where you can get the best results. For clothing brands, this involves the chain from production to consumer,” says Geert.

You mean like working conditions in Bangladeshi clothing factories?
“Yes,” says Geert. “And, more recently, clothing brands have also started to focus on reducing their carbon footprint. For instance, brands are now looking at what materials they use and how much energy it takes to produce and sell their collections. Most major brands are now working on improving working conditions as well as reducing environmental damage.”

Roland adds: “There is a race to the bottom under way in shopping malls to see who can offer clothes from low-wage countries that are made as cheaply as possible. Clothing that is sometimes made under appalling conditions. This is a trend we would like to break, even if it is difficult.”

And VIA Outlets is trying to promote the discussion with these pop-up stores?
Geert comments: “Yes, we do want to start a debate about sustainability. We felt like it didn't exist at all in the retail outlet environment. Sustainability is growing in importance, for us and for the customer. We, as VIA Outlets, can talk about standards and how much energy we save, but customers aren’t interested in that. If your aim is to make sustainability relevant to the customer, you have to communicate about topics that are relevant to them. That could be RE.love. Holding themed days on, say, reducing plastic waste can also get customers thinking.”

Is facilitating this discussion the duty of a real estate owner? Is making money not more important?
“First and foremost, we have to make money, otherwise we have no future as a company,” explains Geert. That said, we also have a role to play in society. People expect us to be sustainable. I think it’s dawning on companies that it’s becoming more and more important to be concerned with the long term, and not just with making as much money as possible in the short term. As a real estate owner, we are part of the chain in the clothing industry. We are only a link, but as such we can influence the chain.”

Roland adds: APG believes it is important that the real estate investments in which it invests show initiative when it comes to sustainability and reducing their carbon footprint. Because APG wholly owns VIA Outlets, we can encourage the company to lead by example in the fashion industry. The interesting thing about RE.love is that a real estate owner is sparking the debate about the products in the stores, where previously the conversations might have been only about the store’s power consumption.”

Is VIA Outlets alone at the top when it comes to sustainability or are there more major players in the real estate field that are rated as highly as you are?
“We are in ninth place when it comes to retail in Europe. That’s not bad when you consider that we are a small company. Listed companies are often further along in the process because they have to meet higher standards when it concerns reporting on sustainability,” says Geert.

How would you describe your partnership with APG in your pursuit of sustainability?
“This partnership is very important, because we know that APG values sustainability. We also have regular meetings in which we update them on what we are doing in terms of sustainability. We also have a dashboard that shows APG the results of our key commitments with them. And we discuss specific initiatives with them. So APG monitors our progress very closely and they also encourage us to be very ambitious. This is a very positive thing as far as we’re concerned,” says Geert.

Roland emphasizes that VIA Outlets is not the only company where APG is calling for the appointment of a sustainability manager. “We have a progressive policy, and we sometimes encounter resistance in the beginning. That is why it is necessary to engage in dialogue with the companies and funds in which APG invests. By engaging in that dialogue, we can ensure that we are not only raising GRESB ratings but also the overall awareness for sustainability. We are one of the frontrunners and, if we want to take the rest of the pack with us, it means that we have to spend time and focus our attention on this.”

Real estate contributes more than 30% to global carbon emission and 40% of global energy demand, and that is why it has a major impact on climate change. What is VIA Outlets doing to contribute to the Paris Climate Treaty goals?
Geert comments: “We are using the CRREM for this. It’s is a way to get insight, for each building type per country, into how much energy and carbon a building may consume and emit through to 2050. Shopping malls that comply with the CRREM are ‘Paris proof.’”

“Originally CRREM only applied as a method for commercial real estate in the EU. Along with two other investors, APG facilitated the development of CRREM for all global real estate markets. For APG, CRREM is the standard for measuring the extent to which a real estate or portfolio meets the Paris climate agreement. This approach chimes with ABP’s aim to reduce the use of fossil fuels in carbon-intensive sectors, and is our largest pension fund client,” says Roland.

Current topics with regard to the economy, investment (responsible investment in particular), pensions, and income: Every week, an expert at APG provides a clear answer to the “Question of the week”. This week: Joost Slabbekoorn (Senior Responsible Investment & Governance Manager) examines the probability of the Glasgow Climate Summit producing concrete results. “Financial support of developing countries will be one of the most hotly disputed items.”

On the eve of the Glasgow conference, news items are following one another at a hitherto unprecedented pace. If one thing has become clear from this cascade of reports, it is this: We are not in good shape. The countries participating in the Paris Climate Conference in 2015 had agreed that the global temperature should not rise by more than 2 degrees by 2100, and ideally by no more than 1.5 degrees. If we continue at our current pace, we will reach that 1.5-degree rise as early as in 2030. The UN’s UNEP environmental program warned that the 2.7-degree mark will even be in sight by 2100 if we do nothing.

First Step

There is plenty of work to be done. However, the question is: Who will be taking the first step? “Historically speaking, responsibility for CO₂ emissions lies primarily with Western countries. Nevertheless, countries such as China and India, above all, are currently registering a rapid increase in CO₂ emissions. These countries cannot develop in the same fossil fuel-driven way as Western countries did in the past. They are simply too big for that. However, the rapid increase in CO₂ emissions in those countries can also be attributed to the relocation of European steelworks to China!”

Countries such as India and China are able to partially shore up their development with renewable energy. Western countries at the Paris conference pledged 100 billion euros per year in climate development aid to support them in this. That promise has, however, not yet been kept. Slabbekoorn explains, “Chances are that this will also be one of the most hotly debated topics in Glasgow. Developing countries want rich countries to provide them with financial support in order to restore confidence. The ‘trade’ in targets between countries will be another topic of discussion. In this scenario, rich countries contribute to the reduction of CO₂ in developing countries, because it is cheaper and easier to reduce these emissions there than on their own territory. Unambiguous rules are needed to facilitate this trade and to be able to verify it.”

Priorities

Slabbekoorn can identify a number of points on which action is needed. “One of the most important priorities is to phase out the use of coal for the production of electricity. Coal produces quite a lot of CO₂, even though a good alternative is available: green electricity. Deforestation is another source of huge CO₂ emissions. A third priority is to set a realistic price on CO₂ and to stop funding the fossil fuel industry. It is remarkable that people in the Netherlands are currently provided government support to pay their energy bills. This is understandable, given the current situation, but it does mean that the government is indirectly funding fossil energy. Rising energy prices are also making many countries reluctant to accelerate the termination of coal use. And combating deforestation requires the support of Brazil. Unfortunately, Brazil currently has a president who is a champion of the logging sector. In short, things are not looking good in Glasgow when it comes to these three priorities.”

With the current gloomy outlook, it is inevitable that some measures will be impacting the lives of consumers. Slabbekoorn explains, “It is imperative that consumers are inconvenienced; otherwise, they will not change their behavior. And the sooner the transition to a more sustainable world is initiated, the less money and effort it will cost. Ultimately, this will also be more pleasant for the consumer. If we don’t take action now, we will have to intervene much more strongly later on. Then the break with our current way of life will be a lot more dramatic, through significantly higher costs for governments and consumers, for example.”

Reluctance

If the outcome of summit produces few or even no results, further global warming appears to be inevitable. “But there are many more roads leading to Paris,” Slabbekoorn argues. “If it nevertheless turns out that no agreement will be reached in Glasgow, this does not have to mean that remaining within the aforementioned 1.5-degree limit is impossible. A much stricter policy on energy and sustainability will therefore need to be imposed in the coming years. And the question is whether such policies will indeed be taken into effect, considering that countries are showing quite a bit of reluctance when it comes to adopting overly strict measures. In the meantime, we are already noticing the physical effects of higher temperatures.

It is ultimately up to the countries participating in the climate summit in Glasgow to incorporate possible agreements into their legislation. The Paris climate agreement is legally binding, but there is no international instrument to enforce it. “Once these agreements are embedded in national legislation, a country can be held to them by the courts. We saw this in the Netherlands in regard of the case brought by Urgenda against the Dutch government. Diplomatic contacts are very important during a summit like this. Still, this brings us back to the first point, which is who will be taking the first step. It doesn't look as if ‘Glasgow’ will produce any concrete results, but you can never predict what will happen at a summit like this. So, I’m keeping my fingers crossed,” says Slabbekoorn.

Raymond Starren’s alarm clock goes off at four fifteen on the morning of November 11, 2019. Even for a morning person like Raymond, that’s early. To get ahead of the commuter traffic between where he lives, in Almere, to where he works, at APG in Amsterdam-South, he usually gets up at five o’clock. On this particular Monday morning, however, he needs more time to get ready for the workday. His coworkers at Asset Management are going to meet ‘Evelien’.  ​​​​​​​

After showering and shaving, he carefully applies his make-up. Then it’s time to get dressed. He has multiple pairs of trousers, turtleneck sweaters and suits hanging in his closet. Today he will be choosing a different outfit. Two weeks ago, he went shopping with some female friends to find a suitable outfit for this special day. He ended up choosing a long, black, floral-print dress and a black cardigan with the same colors. Classic and business-like: that best describes the style. And he got a pair of No Stress black heels. Once he has put on his wig (shoulder-length blond hair), he is ready for the drive to work. Today, Raymond’s APG coworkers are going to meet Evelien for the first time. He’s not that nervous. Come what may, she thinks, as she gets into the car.

Suspicions
Raymond must have been around 3, when he first began to suspect that he was “different”. “I already liked certain girls’ things at that age. I liked dressing in my mother’s clothes, which were much too big, of course. But although some kids know that they were born in the wrong body early in life, for me that was less clear. I also had a boyish side: I liked roughhousing and enjoyed playing soccer.”

Once puberty hit, those feminine feelings kept coming more to the foreground, though. But they did not lead to a clear “this is what I am”. There was still a lot of doubt. At the time, simply denying those feelings seemed like the easiest path. “And that’s what I tried to do, literally for decades.”

Liberation
He met his current wife at the beginning of 2000. They soon started to make plans to move in together in Maastricht. For Raymond, that was the right time to break the long silence about his secret feelings. They were planning to build a future together. She had the right to find out about that other part of him. He was very happy when she responded with understanding. He was given all the space he needed to explore his feminine side. His wife’s approval felt like liberation.
​​​​​​​“I became the chairperson of an advocacy group for transgenders, got photographed as a woman for a photography show, organized meetings at the COC in Maastricht. I could finally be myself.”

Doubts
In 2008, many things changed in Raymond’s life. His wife got pregnant and he was offered an interesting job at APG Asset Management. A job that was interesting enough to say goodbye to his hometown of Maastricht. They moved to Almere and their daughter was born there.

“Those events certainly made me think. Can I really do that to her; go through life partially as a woman? Is that not confusing for her? Will people tease her about that? And how will people at APG react? The Asset Management world is generally experienced as pretty masculine, after all. Sometime during that period, employees were also asked to identify any secondary positions they may have. I didn’t want my volunteer jobs to come out in the open, so I decided to completely stop all my transgender activities and public expressions as a woman.”

Goodbye
Three years after the birth of their first daughter, they had another girl. Raymond played his traditional role as father, husband and male coworker during the day. Only after the kids were asleep at the end of the day would he give himself permission to be a woman. He would change his clothes and stay awake until deep in the night, behind closed curtains, to hold on to that feeling of being a woman for as long as possible. “I didn’t want to say goodbye to Evelien.”

After a while this became mentally and physically exhausting. “At the beginning of last year, I really felt that if I kept hiding my feelings any longer, it would be the end of me. I decided to seek help from Stepwork, a GGZ (Dutch Association of Mental Health and Addiction Care) association that specializes in helping transgenders. At the same time, my wife and I decided to share my feelings with friends, acquaintances and also our children.”

Relief
Raymond remembers the tension he felt when he was going to tell his daughters. They were ten and seven at the time. “My oldest daughter is quite sensitive. I really feared that it would be hard on her. However, the reactions to the talk were 100% better than expected. My youngest daughter initially accepted it in a carefree way. My oldest daughter also didn’t have any problem with it. Of course, it took some getting used to, to actually start seeing their dad as a woman. It was especially my youngest daughter who needed some time for that. But by now, she is completely used to it. Now she often asks me in the morning: ‘Dad, are you a girl again today?’ She even helps me put on my make-up.”

Positive
People suffer most from the suffering they fear. “But the hurdles I had foreseen turned out to be not even there at all. Even my oldest daughter handled the whole situation with an incredibly sober attitude, contrary to our expectations. Her teacher asked me to come and talk about myself as a woman for a school project about diversity. I personally didn’t have a problem with that, but as a parent, I didn’t want to do anything that could make my daughter feel awkward. We therefore decided to decline. My daughter got wind of that and commanded me to come and do it. ‘Why be all secretive?’ she asked. Her classmates already knew anyway.”

All our friends and acquaintances also had a positive reaction. The next step would be to inform my coworkers too. “First I had a talk with the CFRO of APG Asset Management. I already had a relationship of trust with her. She also had diversity and inclusion in her portfolio. The next time we spoke, she asked me: ‘Wouldn’t you like to just come to work as a woman?’ That really got me thinking. What could happen to me? Why would I worry about coworkers who might have a problem with it?”
Many more good talks followed: first of all with her manager, but also with board members and direct coworkers. The talks and reactions were all positive. “And then my manager and the HR manager and I together plotted a course for when I would come to the office as Evelien for the first time.”

Relaxed
On that November 11th, Evelien walked into the office in Amsterdam at six-thirty in the morning. She was relaxed. “I was completely ready for the meeting with my coworkers. About seventy coworkers in my immediate work environment already knew that I would be coming into the office as a woman. I was not afraid of the reactions of other coworkers and people in the street. I knew from experience that most people react positively. I got laughed once by construction workers as I walked by. But I didn’t care about that. They had no idea of the struggle I had been through to be able to stand there as a woman. That knowledge and the feeling of inner balance is not something anyone can just rob me of. I just smiled and that seemed to be the end of it for them too.”

She didn’t get a lot of work done that day. Everyone stopped by for a chat. The reactions were heart-warming. “One said I was pretty, another one praised me for being so brave. And from my female coworkers I immediately got a sense of being welcome, that I belonged.”

Balance
This memorable day became the start of an initially weekly rhythm. “First I was going to the office as Evelien every Monday. After that, I added Thursday. When the corona crisis happened, that regularity fell away. Sometimes I was Evelien several days in a row, and then I was Raymond again for a longer period. My wife and I try to keep the right balance. After all, she fell in love with Raymond, the man. But she’s happy for me and gives me space to be myself. And, as much as possible, I try to be the partner for her that she fell in love with.”

Peace
The first important steps in Evelien’s personal search have now been taken. But not all questions have been answered yet. How much of a desire is there to go through the physical transformation into a woman? “In a process that is starting soon, I hope to get more clarity about that. For now, I am just happy about the steps that I have taken so far. It was meant to be. That’s what I thought when I was driving home again on November 11. I finally found peace.”​​​​​​​

But he did not kill her, because in between dream and act 

there are hindering laws and practical issues, 

(from: Willem Elsschot, The Marriage) 

Pension may seem like something in the distant future to generations Y and Z, but they are the generation of the future. What do they dream of? What are they doing to accomplish that? And what stands in their way? In this series, we invite youth to talk to us about what now and the future look like to them. 

Marleen de Witte (21): "I don't always connect with peers who are busy with completely different things." 

Who Marleen de Witte (21). She describes herself as an enterprising young girl who is very busy with the future and has a positive outlook on life. 

Lives In Huijbergen in Brabant, near the Belgian border. She currently lives with her parents but soon, she'll be living at work. "I'm going to be a house parent, which means that I'm there day and night for the residents of the institution where I work." 

Works as a starting actress and as an educational counselor in an anthroposophical care institution for people with intellectual disabilities, autism and psychological problems.  

Loves: "Musicals, singing lessons, music at full volume, wandering around for hours in thrift stores and home improvement stores, developing myself, taking courses and having good conversations. Those are things that make me very happy." 

What are your dreams?  

"I secretly dream of getting a cool role in an exciting film or series. I'm working hard for it but it's hard to get into the acting world. Fortunately, I have another passion: I would never want to give up my work in health care. I would prefer to combine the two. A few months out of the year for filming and then back to my other job.  

I think about the future a lot. I want to have children and eventually want to become a foster parent. My parents still are. There are seven of us at home, but there was also room for others. I see that as an enrichment. We always took in various children at home. As a result, I realized early on that having a carefree childhood is not a given. It taught me to appreciate what I had and have. My parents taught me that behavior always comes from somewhere. At school, this helped me to understand bullies, for example, now it helps me in my work. It seems very special to me to be able to offer a safe environment to children who need it later on. No matter how heavy their bag, I can help lift it." 

How do you envision your future?  

"With a husband and a family. I also hope to see a lot of the world, and to be able to do what makes me happy. As long as I continue to listen to my gut feeling, I have every confidence that my future will be fine." 

What does your dream retirement look like? 

"I hope to be able to go where I want, without having to worry about money. I wonder at what age I can retire, if it won't be very different by then. Of course, I hope that my pension and state pension will be enough to live on, but just to be sure, I also want to invest some money myself, so that I have an extra kitty. I don't know if I would like to stop working. Maybe by then, I'll be teaching, telling others what I've learned. Or do volunteer work. Maybe I enjoy that a lot more than when I don't do anything anymore." 

What is your dream for the Netherlands? 

"I have several! For example, I dream of a Netherlands in which there is health care for everyone, without deductibles. I'm afraid that people who can't afford that deductible will postpone a visit to the doctor. A lot of money is now also spent on treating disorders and diseases, while it would make much more sense to prevent them. Healthier food should be much cheaper than unhealthy food.  

In addition, in my ideal Netherlands there would be many more foster families. I want every child that can't live at home to have a foster family. The youth is the future. Children need to have a good start in order to be able to make something of it later.  

Lastly, I would like it if the Netherlands would realize that every level of education is equally important. Why don't we think in practical and theoretical terms, instead of high and low-skilled? Isn't it cool when you start working with your hands? It shouldn't be seen as inferior. I'm glad my parents encourage me to do what makes me happy. Getting by is important, but being happy comes first." 

What do you think is going well in society, what makes you proud? 

"I think it's great that education here is accessible to everyone. Health care is also very good, although it could be better and cheaper. The fact that we have freedom of expression in the Netherlands is also something that makes me proud; it's not a given." 

What could be better in the world? 

"It shouldn't be all about power and money. If people allow each other a little more instead of always striving for more, I think that a large part of the world problem would be solved." 

What worries you, with a view to the future? 

"Sometimes, I'm afraid of the consequences of digitization. In my youth I came home covered in mud, I hung in trees, I was really a child. These days, children are sitting at home with a tablet, watching movies. On the one hand, it's easy that the world is becoming more digital, but it comes at the expense of other things. I also find social media difficult every now and then: isn't it sad that people become insecure if they get few likes? I often notice that peers are worried about it. Such a waste of your time." 

What makes you angry? 

"The division created by the government between the vaccinated and the unvaccinated. People should do what they feel safe and good about. Now, a vaccination is slowly being enforced and you're a kind of pariah if you haven't got any shots. I've not been vaccinated, even though I work in health care. I think that too little is known about these vaccines and it doesn't feel safe to me. Also, I had corona and I came out well. I fully understand people who do get vaccinated, but I also understand people who don't. But it seems the latter is an opinion we're not allowed to have. That makes me a bit rebellious. For me, the corona pass is no reason to change my mind. I also enjoy myself without clubs and dinners in restaurants." 

What stands in the way of your dreams? 

"Myself, mainly. Sometimes, I want too much too soon. At times, I think: come on, you're only 21, enjoy a little more. I don't always connect with peers because I already live a much more mature life than they do. College friends go to parties every weekend and worry about whether or not to buy designer clothes. There's nothing wrong with that, but I think about completely different things. My job, taking care of people, gives me much more satisfaction than a night at the pub. I don't just do anything. I wouldn't do a little dating anytime soon either. If I get into a relationship, it has to be with the future father of my children, otherwise I think it's a waste of my time. Sometimes, I wish I could be more in the here and now. Sometimes, I am too hard on myself."  

What are you doing to realize your dreams?  

"Listen to my gut feeling. I've always done that, and it's gotten me far. I'm proud of where I am now. I do what makes me happy and I work hard for it." 

And what do you do for a better Netherlands and a better world? 

"I've been in a panel for people who want to become a foster parent since I was 12. I tell others about my own experiences as a foster sister. I hope to inspire them. I also think that what I do means a lot to others. I'm beside the residents of the institution and help them to live their best possible lives. Soon, I'll be a house parent there too, so I'll be there for them day and night. When I see what a rock the current house parent is for the residents, I think it's very special that I can take on that role." 

Current questions related to economics, (responsible) investing, pension and income: every week an APG expert gives a clear answer to the question of the week. This time: equity investor Martijn Olthof, about the explosive rise in the price of gas and electricity. “We are not expecting the low price levels from just before and during the covid period to return.”

The current price for gas and the accompanying price for electricity are at a record high. Natural gas tripled in price in 2021. Now that gas production in Groningen has been scaled back, we have become more vulnerable to these kinds of extremes. Where will the rise of the energy price end? According to Martijn Olthof, who is responsible for equity investment in the energy sector at APG, the current prices for gas and electricity are probably at an extreme peak. In the short-term it could go even higher, for example, if Putin and the EU do not reach an agreement about the Russian pipeline Nord Stream 2. But after that, the energy price will lower again, Olthof expects. We are not expecting the low prices from 2020 to return.

The sharp rise in gas prices this year has four causes, Olthof says. The first one is: the relatively cold winter and spring, we just had. “That greatly increased the demand for gas, particularly in Asia, and as a result a lot of liquefied natural gas - LNG - went to that continent. Because the winter and spring were also cold in Europe, that pushed up the price of gas.”

The temporarily lower supply of natural gas from Norway - major maintenance on a number of gas fields caused production interruptions - also had an upward effect on the gas price. Olthof: “Certainly now that gas production in Groningen has been cut back, Norway is the main gas supplier in Europe. Because of the faltering production, Norway has supplied less gas than usual.” The third cause of the gas price explosion in 2021 was the economic recovery, which caused the demand for gas to rebound.

Close the valve

And then there is a geopolitical factor. Olthof: “The amount of natural gas supplied by Russia is the same now as it was a year ago. But then, due to the lockdowns, demand was unusually low and the price was less than a fifth of the current price. Russia’s failure to meet Europe’s greater demand for natural gas has clearly had a driving effect on the price. Most people think Putin is doing this to force approval from the EU for the Nord Stream 2 pipeline, which Russia wants to use to transport more natural gas directly to Germany. Currently, gas already flows through the Nord Stream 1 pipeline directly but a lot is also being transported through the Ukraine. But for Nord Stream 2 to come into operation, the green light is still needed.” The question is, however, how soon more gas will be coming from Russia, even with Nord Stream 2 coming into operation, because Russia will first replenish its own storage stocks.

The price of electricity is partly determined by the price of gas. But there are two more effects on the pricing of electricity, Olthof explains. “Firstly, there was relatively little wind this year, which meant that the supply of wind energy was unusually low. But the high carbon price has also contributed to the rise in the price of electricity. After all, generating electricity becomes more expensive when emitting carbon becomes more expensive.”

Challenging winter

So much for the past. What can we expect in the near future when it comes to energy prices? Olthof: “It seems that the current prices of gas and electricity are outliers, with clearly identifiable causes. A number of them will play a smaller role, or none at all. Intermittent production in Norway will start up again and the supply of wind energy will rebound. And Nord Stream 2 will also be given the green light at some point, increasing capacity from Russia by 55 billion cubic meters per year. It will take some time to replenish the shrunken gas reserves. But these developments will bring energy prices back down, even though I see the high carbon price increasing rather than decreasing in the future, and energy demand will also remain steady for the time being. However, we should not expect the low levels from just before and during the covid period anymore. And if we get a severe winter without a deal with Putin, gas and electricity prices could skyrocket even further in the interim. That could make it a challenging winter for many European countries, but the UK in particular.”

Because in between dream and act
there are hindering laws and practical issues,

(from: Willem Elsschot, The Marriage)

Pension may seem like something in the distant future to generations Y and Z, but they are the generation of the future. What do they dream of? What are they doing to accomplish that? And what stands in their way? In this series, we invite youth to talk to us about what now and the future look like to them.

Indya Duivenbode (27): “We have to work together to make growing older in good health a priority.”

Who: Indya Duivenbode (27)

Residence: A rented house in the inner city of Rotterdam, with her boyfriend and her dog. “We would prefer to buy. But, even though we pay 1100 euros in rent every month, we were not eligible for a mortgage of 700 a month. It doesn’t even make sense.”

Work: Health economist Indya was a consultant in the care sector, but she quite her well-paying job earlier this year in order to start her own company, with which she wants to make more impact. “Zorgstelsel Unpacked” (The Healthcare System Unpacked) is an online community that is focused on the healthcare system. Indya has two aims: to make the healthcare system less complex and to connect parties with conflicting interests.

Enjoys: Sports (cycling, running, playing basketball), walking with the dog and nature.

What do you dream of?

“I dream of being able to design my life in a way that suits me, rather than conforming to what ‘society’ expects of me. Until recently, I was following the beaten path. Now I have quit my secure consultancy job to do something that suits me better. I’m trying to let go of limiting beliefs. For example, I thought that having a dog did not go hand in hand with a career. But when the corona virus broke out, I adopted one anyway. If I keep putting it off, I thought, I won’t have a dog until the time I retire. All around me I see people living for tomorrow instead of now. It is my dream to live more in the moment. I don’t always manage that yet, but I think it’s very important."

What does your future look like to you?

“It may sound a little vague, but I hope that I’ll be doing something that I can’t even imagine yet right now. The thought of knowing exactly where I’ll be in five years is not attractive to me and seems very limiting. In the future, I hope to have grown and learned a lot. Overall, I do see the future as bright. If entrepreneurship doesn’t work out, I know I’m privileged enough to be assured of salaried work for the rest of my life. I don’t know yet if I want children. I think not having kids gives you a lot of freedom.”

What does your pension look like in your dreams?

“I would like to be financially independent before I retire, just like many others of my generation would. I hope I won’t have any money worries and won’t need to work anymore, long before my so-called retirement time. I’d love to be able to keep doing what I enjoy most, and to help others. Not to get rich, but because it feels good. And I hope to grow older with my boyfriend in good health.”

What is your dream for the Netherlands?

"For everyone to grow older in good health. I am very passionate about this. Together we must ensure that healthy ageing becomes a priority for all Dutch people. I also dream of a Netherlands without discrimination and with more empathy and understanding. I identify as a feminist, and am still learning more about exactly what that means every day. I am a white, highly educated woman, I can speak from my own experience about male-female relationships, but feminism goes much further than that. I don’t know what it’s like to be discriminated against because of your background, religion or a disability. I think it’s important to be aware of your privileges, and to have understanding and empathy for people who are in a different situation. You should never feel better than anyone else, but certainly not less either. Those are principles I try to live by. I strive for equality.”

What do you see in society that you like and what makes you proud?

“I like seeing how many small initiatives there are at the grassroots level to connect people. In my neighborhood there are language cafes, for example, where different cultures can learn Dutch together, and there is a park that is maintained by the neighborhood. What also makes me proud is that my generation and the generation just after us are, in my view, much more concerned with making an impact than with making money and having a nice house. There are few young people denying the climate crisis, and I feel like we are thinking a lot about how everything can be better and more equitable. That gives me hope for the future.”

What could be better in the world?

“Haha, do you have a few hours? First of all, everyone should have equal opportunities and there should be less prejudices. That would improve the world. There is also a lot that can be improved in the healthcare world. There is an ever-increasing staff shortage, for example. It is expected that by 2040, a quarter of the Dutch population would have to work in healthcare in order to provide adequate healthcare services. In other words: that’s impossible. Healthcare must therefore be organized differently so that services can be delivered with fewer staff, and the demand for care must be reduced through prevention. We have reached a point where we have to get creative. Because we won’t be able to solve it by 2040 with a bit of polishing. It’s a complex issue that we should all be working on together.”

What worries you about the future?

“My biggest worry is still climate change. What is the most helpful thing to do? What can you affect? How can you contribute something? I find it very complex. But looking the other way and not doing anything is not an option.”

What makes you angry?

“Discrimination, inequality, racism, ignorance... Those are things that make me angry. I’m often asked, primarily by men: do we need feminism? Some people think I hate men. But men are not the problem. The problem is society, which is conditioning men a certain way. Once you see what’s wrong, you can’t unsee it anymore.”

What is in the way of your dreams?

“People without empathy. It’s also discouraging that at my work I’m not always appreciated for shaking things up in healthcare by making taboos discussable. That makes it harder.”

What are you doing yourself to make your dreams come true?

“I gave up my job in consultancy to make more of an impact in healthcare. That means I probably won’t be able to buy a house for a while, but I believe in what I'm doing so much that everything else has a lower priority. On the one hand, I’m trying to make progress this way, and on the other hand, I hope to inspire others to walk their own path as well. I’m already noticing that people around me are increasingly knocking on my door if they want to brainstorm about life choices. I love that. I believe that the world will be a better place if everyone does what is right for him or her.”

And what are you yourself doing for a better Netherlands and a better world?

“I believe that my company is going to make the Netherlands a better place. I am putting a lot of time and energy into it, to make the healthcare system more comprehensible and I’m working on a community to connect care professionals, managers and policy managers to each other. I want to create equality in a world that is still very hierarchical. I also try to stand up for people who are less privileged, even if that makes me less popular.”

But he did not kill, because between dream and act
there are hindering laws and practical objections

(from: Willem Elsschot, The Marriage)

Pension may be considered as something for the distant future by generation Z, yet they are the generation of the future. What are their dreams? What are they doing to achieve these? And what is standing in their way? This series is intended to let young people speak about the way now and later on is perceived by them.

Maarten Paauwe (25): “We have to live much more in harmony with nature.”

Who: Maarten Paauwe (25), born and raised in Zeeland. He studied engineering management in Tilburg and married Talitha three years ago, whom he already knows for ten years. “Promising each other to be faithful, is a beautiful thing in my opinion. We were pretty young when we got married, but why wait when you know you are meant to be together?”

Lives: In Gorinchem, where they ended up after a scheduled journey around the world fell apart due to the pandemic. “We sat down with a map of the Netherlands and asked ourselves what would be a nice place to live. Most people only know Gorinchem because of the traffic jams, but it truly is a great old, fortified town.” They are currently renovating the house they bought here in its old style (it was built in 1880). The house will be partly transformed into a bed & breakfast.

Works: At a green contractor, providing green management for municipalities, counties and the Netherlands Department of Public Works.

Enjoys: DIY, reading (mainly newspapers, history and philosophy) and trips to old cities.

What do you dream of?

“I dream of all of us living much more in harmony with the world and nature. Take the IPCC report, for instance. All evidence suggests that we live increasingly more distant from nature. I think this is something we could improve at different levels. On the one hand by means of better landscaping as we shouldn't adjust our planet to our demands. The topic ‘green’ now is the balancing item: we continue to build at every possible location and we plant a few trees should any space be left. This should be the other way around: nature first and some space for human beings here and there. Just look at a schoolyard for example, that almost entirely consists of concrete. Children should already be given the message that we are only guests when it comes to nature. I think humankind should focus more on that, also because it's simply better for our health. The average person is overweight, eats a lot of meat and consumes a lot of dairy products: that's not the way nature is arranged.”

How do you envisage your future?

“On the basis of things, I already have everything I want. I am happily married, own a house, have a great family and enjoyable work. In terms of work, I would like to manage a company someday, so I can implement my vision in a large-scale manner to the green industry. I would like to sit down with policymakers and make the Netherlands more sustainable. In my opinion, the company I am working for now is literally making the world a bit more beautiful by constructing green areas.”

What does your dreamed of pension look like?

“First of all, I hope to be healthy and energetic for a long time, so I can still make a contribution to society in the future. I am wondering if we will ever get a pension though. Many people my age want to become FIRE (Financially Independent & Retire Early), start investing or buy properties in order to be able to retire as early as possible. I don't think that is a healthy way of handling pension, given the costs we already have as a society. Moreover, all evidence suggests it is much better to continue work as long as possible. Albeit at a slower pace, not from eight to five in an office job. You can also contribute to society being a volunteer. So, I hope to be able to do so myself, but I also hope that this will be what society aims for in the future. Older people have so much talent and experience which will all go to waste if they just sit at home or are travelling the world. Of course people should enjoy their freedom, but I truly believe that we, as a society, draw insufficiently on those skills and abilities. I also think it would be great to remain relevant. You could still call it pension if you work twenty hours per week to leave a better society to the next generation. We shouldn't consider work as an obligation, but as something great.”

What is your dream for the Netherlands?

“I would like the Netherlands to become a healthy society, in the broadest sense of the word. We have to commit to a healthy planet, a healthy ecosystem and a healthier bio-industry. The way we are treating animals right now just isn't okay. I read an article a while ago, stating that if people would be slaughtered at the same pace as we slaughter animals, the entire global population would be extinct within seventeen days. I hope the Netherlands will become a frontrunner and shows there is another way to do things. The Dutch could also live a lot healthier. While we are living longer, we also live unhealthier. And finally, I dream of a healthy economic system. The mountain of debt is getting higher and higher. Study loans, national debt; it all increases. That is cause for financial stress. Wouldn't it be great if our country could demonstrate that it's unnecessary to accumulate debts in order to ensure continuity?”

What do you believe goes well in our society?

“One of the greatest things of the Netherlands is that the opportunities here are huge. That also applies if you grow up in a less favorable neighborhood, if your parents have a non-Dutch background or if you were born into a poor family. Everyone here is able to get an education.”

What could be improved in the world?

“Equal opportunities. Talitha and I visited slums in India and that truly is another story. If you grow up there, there's no chance whatsoever to make something of your live. Here, in the Netherlands, hard work usually pays. In India, you can work as hard as you'd like without achieving anything. Isn't that a sad fact?”

What are your matters of concern in view of the future?

“That we still don't seem to recognize the urgency of certain issues. Take, for example, the climate report of the IPCC. Climate change will eventually become irreversible, but when will we realize this? Everything is happening so slowly. I am also worried about the increasing polarization. An endless amount of information is available, we are able to communicate with one another all over the world, but we hardly ever do that. We take more and more refuge in our own bubble. Forum voor Democratie (Dutch political party) wants to start its own society with its own crypto currency, dating app and schools. When I hear that, I think we are truly losing grip on each other. This way we return to a fragmented society. And we should furthermore not forget a generation proud of its cancel culture, in which people are cancelled at the slightest lapse. That leaves us with a cramped society in which everyone chooses their words carefully and is afraid to speak openly, because we are trying to avoid insulting someone. We could take ourselves a bit less seriously. Tolerance is harder to find these days.”

What makes you angry?

“What especially makes me angry is that many things are well arranged in the Netherlands, but that 'we’ don't really care about everything that's going on beyond our national borders. We construct oil pipes in the Middle East, but not water pipes where it's much needed. We use large chunks of land to feed the cows, but we prefer not to do the same for another population. Moreover, what I find particularly disgusting when it comes to the corona policy, is that we buy all vaccines in massive quantities in the West and start vaccinating young people, while vulnerable people over the age of 60 in India are begging to please be vaccinated. And, of course, the pharmaceutical companies are not releasing their recipes. There are more crooked things. I recently read an article stating that the prices of healthy food are rising faster than the prices of unhealthy food. This makes it more difficult for people with a low income to buy healthy food, while that's a basic need.”

What is standing in the way of realizing your dreams?

“Not so much when it comes to my personal dreams. I will mainly have to work hard to realize everything I dream of. I do notice that there are all kinds of things that annoy me, but I find it hard to give these issues substance. I don't know where to turn to with my combativeness. Would it be possible for me to join some sort of climate committee? Are there more younger people like me, full of energy and activism, facing the same problems? Could we debate about these topics together and commit ourselves to make society a better place to live? I am eager to take action, but how do I get in touch with the right people to really accomplish something?”

What is your own contribution to a better world?

“I drive an electric car and I am vegan. That was a deliberate choice as I am trying to demand as little as possible from our planet. Due to that choice, I often discuss the impact of our meat and dairy consumption on the climate with others. It is not my intention to force anyone to become vegan - if you have barely anything to eat, like in some African countries, you just eat what's available - but meat and dairy are not necessary in the Netherlands.

Besides that, I use my talents at a company that's contributing to a better world. It would be very difficult for me to work for a company such as Shell for instance. This is my way to do my part at a small-scale. It would be fantastic should I be able to address these issues on a larger scale, together with others.”

The report by the United Nations’ IPCC, Intergovernmental Panel on Climate Change, underscores the rapid, human-induced increase of global warming. If we don't take action now, temperatures could rise by nearly six degrees Celsius towards the end of this century. If we do act now, the goals of the Paris Agreement are still achievable. Large companies and investors can make a difference. The question is: Are we currently doing enough to turn the tide? According to Joost Slabbekoorn, senior responsible investment & governance manager at APG, at least we're on the right track. “We have long seen the need to take action and that's exactly what we're doing."

The conclusions drawn by the UN report don't really tell us something new: Humans “unequivocally” play a role in climate change, the earth has warmed by more than 1 degree in 100 years (much faster than before), the effects of climate change are felt all over the world, and temperatures will definitely continue to rise in the next 30 years. Whether that's by 1.5 degrees in the best-case scenario or 5.7 degrees in the worst-case scenario depends entirely on the actions we take globally.

Reassessing policies

“Yes, the IPCC report makes for very uncomfortable reading," says Slabbekoorn, the person who, together with his team, is responsible for implementing sustainable and responsible investment policy for the ABP pension fund, among others. “But actually, we already knew that things haven't been going well." We have known about climate change for some time. It's with good reason that our focus has grown substantially in recent years in terms of sustainable and responsible investment policies for fund clients such as ABP. But sometimes you know that our approach must and can be more effective, says Slabbekoorn. Conclusions such as those drawn by the IPCC report may then actually be decisive for revising policy. "That's what ABP did recently. We realized that accelerating the energy transition is the only option – and current policies do not adequately make that happen. That's why we’re setting our climate ambitions higher in 2022." ABP is taking this issue very seriously. A panel of scientists at universities is helping us create these improved policies. 

Fossil fuel

In addition, APG, along with 32 other large investors, collaborated on the “Net Zero Investment Framework” – a framework that provides guidance on how to tackle climate change. “It's exactly these types of initiatives – as well as our engagement efforts – that allow us to contribute to a liveable world by using our influence as investors to encourage companies to make more sustainable decisions.” But as Slabbekoorn emphasizes, one doesn't make an impact on their own. “As an influential pension investor, I think we have an obligation to do everything within our power. But everyone must do their part.” One option that climate organizations often propose is moving away from investments in fossil fuels. Does the IPCC report mean that APG will advise its clients to completely stop investing in fossil fuels? "Not necessarily," says Slabbekoorn “Ideally, the fossil fuel industry also needs to be part of the solution. But oil and energy companies will need to accelerate their transition from fossil fuels to renewable energy in the coming years. We are paying close attention to their actions in this regard. If things aren't moving fast enough for us, or we lose confidence, we will stop investing in fossil fuels.”

Mapping out risks

One of the report's other conclusions is that the effects of climate change can be seen all over the world. The floods in Limburg (the Netherlands), Belgium, and Germany are a case in point, and these sorts of phenomena are also influencing APG's investments. “Changing weather conditions are already impacting our investments. In any case, temperatures will continue to rise. This means that climate change will continue to affect our investments. That's why, for our real estate investments, we're already mapping out risks in case of floods, droughts, forest fires, or rising sea levels. We have also developed a dashboard that shows us the physical risks of climate change by country,” says Slabbekoorn.

Ray of hope

“The report, or rather the report's conclusions, truly impact the way we invest. We are taking the right steps, but there is always room for development," says Slabbekoorn, who, despite the report's bleak message, also sees a ray of hope. “The report also states that we can still meet the climate goals by 2050. But to achieve those, we'll really need to get moving.”

But he did not kill, because between dream and act
there are hindering laws and practical objections

(from: Willem Elsschot, The Marriage)

Retirement may be the last thing Generation Z is thinking about, but they are the generation of the future. What do they dream about? What are they doing to achieve it? And what stands in their way? In this series we let young people talk about what the present and the future look like to them.

Bas Grund (20) from Amsterdam: “Anyone can get rich. It’s about making the right choices.”

Who: Bas Grund (20), describes himself as a career tiger and a “super-self-willed guy”, who discovered in high school that school was not really his thing. “I went to the vocational school for a little while, but I already had several enterprises on the go by then and they were doing well. I figured more education would not yield me more in the future. In the world of online marketing, which is where I was, getting knowledge from a book was soon no longer up-to-date. So, I decided to go to work and really go for it.”

Lives in: A rental home in Amsterdam. “I wanted to buy a house right away, but the bank was skeptical because I’m pretty young and was an entrepreneur until recently. Hopefully I will be able to buy something next year.”

Works at: He quit his own company in December, and since then has been the manager of a start-up marketing company that works for restaurants, hotel and pop stages. “Totally sick.”

Enjoys: Listening to music, “anything except recorder and triangle”, traveling, meeting new people, discovering places. “And secretly, I really enjoy working hard.”

What do you dream of?

“Personally, I mostly dream about business success. I would love to be on an executive board down the road. And if I can dream big, I’d like a top position in an international company. A position where I can mean something for the world, but where I can also make a lot of money. Then I would use that money to do something good. For example, invest in making real estate more sustainable and building schools in developing countries.”

How do you envision your future?

“I often fantasize about the future. I’m very curious what it will look like. But I’m also someone who lives day by day. I don’t have goals like, in five years I want to leave here and then I want such and such. I believe that if you set goals you limit yourself to them, even though they could be even bigger. If you don’t set goals, anything is possible.”

What does your dream retirement look like?

“I’d like to retire around the age of 40, so that I can then enjoy my life along with the family I hope to have by then. Then I can make up for the time lost on working and do a lot of traveling – which will hopefully be a lot more sustainable by then, and go out to eat. I’m choosing to work really hard now and then really start to live later. That is radical, and I can’t really think about it too much, about all the things I will have missed out on if I get hit by a bus tomorrow. But work is the priority right now.”

Why is your work so important to you?

“I feel a pressure inside: am I doing enough? I want to be in the lead. I believe you should always do your best, even on weekends and at night. It’s much easier to make sure you stay in first place than to struggle to the front from tenth place. I keep up the spirit to motivate myself. Fortunately, I enjoy working; it is really my passion. I do notice I am in a different phase of life than my friends, even though we are the same age. They go to school and go out a lot. I make it to the odd party, but unfortunately not that often.” 

What is your dream for the Netherlands?

“That everyone can be themselves and can express their opinion without consequences. I notice in my circle of friends that political opinions clash sometimes and that we don’t always understand each other. That’s fine, but that should not lead to people being afraid to express their opinion. You should never be ashamed of who you are and what your stand for. Even if you don’t agree with each other, you should be able to get together for a beer at the pub. It’s not like that’s not happening in the Netherlands now, but I’ve noticed that if you have a different outlook, you are a bit of an outsider. You soon get labeled.”

What do you think is going well in society?

“I think it’s great that we’re all so aware that we have to innovate and look to the future. I’m very proud of how innovative the Netherlands is compared to many other countries. I just wish it would all go a little faster.”

What could be better in the world?

“Peace everywhere would be nice, of course. At a smaller scale, I’d really like it if every country had good infrastructure. You can even see the difference as soon as you cross the border into Belgium now. We are so lucky in the Netherlands. And the gap between rich and poor has to get smaller. How? I believe it’s okay to get taxed more heavily if you have more money, but only on passive income and capital. Labor should be taxed equally as far as I’m concerned, whether you’re a shelf stacker or a manager. Getting rich is a choice to a certain extent, I think. If you want to get rich, you have to make the right choices.”

You believe anyone can get rich regardless of their background?

“Well, if you’re in deep trouble or you have debts, it’s hard. But even then, you can turn it around with the right strategy and a good plan. And well, if you’re born in a slum in India, you have a lot of catching up to do. You’ll have to work your way up. In the Netherland and Europe, we have it easier. But I’d still say that it is possible for anyone to get rich. Look at the CEO of Google, Sundar Pichai. He’s from an Indian family that didn’t have much.”

What worries you in terms of the future?

“The way we are living is not nearly sustainable enough. We really have to work on that together. Another thing I worry about is education. I don’t think it’s growing with the times. In ten years, there are going to be all kinds of new jobs that the school system is not prepared for yet. They’re doing their best, but the development is taking too long, I think.”

What makes you angry?

“Young people that waste their potential, that have a lot in them, but don’t have the courage to dream big. That mentality that 55% is good enough to pass. And when you translate that into a business career, it will stay that way too. What if you went for that 100%? Then your career could be ten times better. Anything is possible these days, don’t be limited by that piece of paper. Get out there and meet the right people, take a subject-specific course. So much more than you think is possible. Just do it.”

What is in the way of your dreams?

“Time, because I’m someone who doesn’t have a lot of patience. On the one hand, maybe that’s good, because I’ve already been able to take some great steps at my age. But on the other hand, it is still not going fast enough for me. As far as I’m concerned, the Netherland should innovate faster, so that there are more opportunities to make my work easier, which will help me reach my dreams faster. Sustainability could be a lot faster and better too.”

What are you doing to make your dreams come true?

“I work about sixty hours a week, as effectively as possible, to rise in the ranks.”

And what are you doing for a better Netherlands and a better world?

“I’m not into those hollow posts on social media; I’m more into doing. I want to initiate change myself. In the past I did a lot for sustainability. I used to have a company called Sustainable places, which helped restaurants, hotels and homes in the Netherlands to become more sustainable. Now I have less time to fully focus on sustainability. Sometimes I use my marketing knowledge for free for sustainability. But if you do a little wherever you go, even if it’s not much, ultimately it will be a lot.”

APG wants to be an organization where everyone can be themselves. Always, all year round. But on occasion, like around Pride Amsterdam, we like to give it some extra attention. Our coworker Edith talks about being accepted and belonging. She feels that these are primary needs that every human being has. But instead, she herself has been fighting against rejection for almost her whole life. “My parents have never accepted that I am a lesbian.”

Anyone booking a vacation right now is looking at the world map that is showing red, orange, yellow and green. What rules do we have to comply with? Where are Dutch citizens welcome? For APG employee Edith*, finding out which vacation country she is welcome in is routine. Because even before the outbreak of Covid-19, she could not simply cross the border for a well-deserved vacation. Seventy countries that are members of the United Nations prohibit same-sex marriage, in at least eleven countries you can even be sentenced to death and in only eleven countries, the rights of lesbian, gay, bisexual, transgender and intersex people (LGBTI) are included in the constitution. Edith: “I can’t take it for granted that I will be welcome anywhere. Not even in the times we live in now. As an almost sixty-year-old, this still astonishes me almost daily.” She tells her story now during Pride Amsterdam to bring a bit of awareness. “It’s important to realize what it’s like for someone to be different.”

Edith was born in South Limburg. She grew up in a Catholic family as the sixth of seven children. Anything that was different was problematic at home. Especially when Edith told them she was a lesbian. "I finally came out of the closet when I was 21. But my parents never accepted it. They kept asking me when I was going to bring a man home, and on the day that I told them I was going to marry my current wife, they said, 'Do you really have to do that?'"

Own choices
Her father thought a psychologist could figure out how serious Edith’s “deviant” orientation was. To please her parents, and just to be accepted, she agreed to go to the session. The psychologist quickly saw that “a 21-year-old woman is certainly capable of making her own choices” and tried to help them see that too. But her parent’s acceptance never came. Edith will never forget the last comment she heard from her dad. “When I was fourteen, I was in a bad accident. I came very close to death. When my father heard I was a lesbian, he literally said, ‘if I had known then, what I know now, I would have wished you had remained dead’.”

Edith hopes with all her heart that today’s parents don’t have that kind of reaction. But even in these times, that is not something that can be taken for granted. “Tolerance has peaks and valleys,” she says. “There are still so many gay people who get beat up in the street. And look at Arie Boomsma’s TV program where he helps young people come out of the closet. The fact that such a program is needed in this day and age is astounding to me.” And closer to home: her own sister votes for the Christian Union, which is known for excluding homosexuality. “There is still too little acceptance, and I’m afraid it will never completely come.” Why is that? Edith, who has since deregistered herself from the church, attributes it to the mix of cultures we live in. “A lot is destroyed by faith and ancestry. But because different cultures, each with their own standards and values, are continually getting closer to each other, we must learn to accept each other as we are.”

Primary need
Wanting to belong, to be part of something is a primary need that is impaired by rejection, Edith stresses. “When you are looked down upon, for whatever reason, it is palpable. That scars you and creates an inner struggle. It is a struggle I have been dealing with all my life; to show who I am and to be allowed to be who I am. When I’m walking down the street holding my wife’s hand, I let go as soon as I see someone. You don’t know when you’ll come across someone who is against it, who will beat you up for being who you are.” The days of being angry at having to be on guard all the time are behind her, though. “It is what it is. I've risen above it and made my peace with it. And it’s now my choice not to advertise it.”

Hype
At work, however, Edith does not experience this kind of discrimination; at APG she does feel accepted. “I think it’s really fantastic that people can share their stories, for example on the intranet. Even five years ago, that was very different. Is that because diversity and inclusion are a hype now? Even if that is the case, that can only be good. We should keep focusing our attention on that, with the result that I can be myself, working for this employer.” But there is still a lot of work to do, at APG as well as in society all around us. “When I mention my partner, for example, in most situations, people will automatically assume I’m talking about a man. And mail addressed to “the ladies”, is not happening yet. So, we’re certainly still behind the times in the Netherlands.”

And then her eyes light up, because Edith has a positive attitude despite the obstacles she has faced in her life (“without darkness, you can’t see the light”), and she is proud of who she is and of her wife. The two of them will be going on a “safe” vacation this summer and stay with an aunt and uncle in Austria.

* For privacy reasons, the name Edith is fictitious.

But he did not kill, because between dream and act
there are hindering laws and practical objections

(from: Willem Elsschot, The Marriage)

Retirement may be the last thing Generation Z is thinking about, but they are the generation of the future. What do they dream about? What are they doing to achieve it? And what stands in their way? In this series we let young people talk about what the present and the future look like to them.

Laura Bas (24) from Amsterdam: “I worry about the waiting lists for mental health services. People who need help - and there are more and more since the pandemic - now have nowhere to turn.”

Who: Laura Bas (24). She recently finished third at Miss World Netherlands and will be starting the Culture Organization & Management master’s program at the Vrije Universiteit in Amsterdam in September. Previously she had studied law at a university of applied sciences. In addition, she is ambassador of the project "Because I deserve it", where she, MEPs Agnes Jongerius and Vera Tax, facilitate workshops on the wage gap for (young) women. “In the Netherlands, men still earn on average 15 percent more per hour than women. It is my mission to change that and I want to continue to work for that.”

Lives in: In a studio apartment (24m2, paying 320 euros) in a social project in Amsterdam. “Half of the residents have permanent residency cards and the idea is for us to mingle. It’s a great place to live, and it’s less than ten minutes from the university.”

Works at: Freelance in contract law and as a final editor at the Amsterdam Student Union.

Enjoys: Writing, history, philosophy, psychology and “pretty much anything that ends in ‘y’, except for biology.”

What do you dream about?

“That as a management consultant I can storm boardrooms in the business world, preferably internationally. I would like to see women being much better represented in the labor market five years from now than they are today. I want to deal with issues surrounding themes like diversity and inclusiveness. I see it as one of the tasks of my generation to bring organizations up to date by tackling outdated processes. Take pronouns alone. At the Amsterdam student union that I work for, a number of people are non-binary. They want to be addressed as ‘them’ instead of ‘he’ or ‘she’. These are changes that our generation needs to start making, including in the business world.”

And what do you still hope to accomplish in your private life?

“I hope to see a lot more of the world. As a naive 17-year-old, I lived in Brazil for a ‘gap year’ and I learned a lot from that. In a country like that, you constantly have to put your own values and standards on the scale in order to be grounded there. It has broadened my view of the world, and since then I have been much less quick to judge. It also made me realize how good we have it in the Netherlands. I still go back to Brazil every two years to visit my friends and the family I lived with. It is very interesting to hear their views on certain subjects. Getting to know other cultures is one of the most inspiring things in life as far as I’m concerned. I don’t have flight shame yet, but I really hope that the experts in that field will be able to develop a sustainable way to travel responsibly.”

Wat is your dream for the Netherlands?

“I hope that in the future our country will be even more inclusive and diverse, more open-minded, and more accepting of others. There is now finally a woman of color (Sylvana Simons) and a transgender person (Lisa van Ginneken) in the House of Representatives. It would be nice if politics and business become more of a reflection of society. I would like the Netherlands to become a safer place for minorities. Because in terms of LGBTQ+ we are not there yet, and strict believers also have a hard time. I hope that we can all live together more peacefully. I wish for that outside the Netherlands as well. I would like to live in a world where we all respect people’s values, without stereotyping and prejudice.”

What does your dream retirement look like?

“I hope to work for an employer where the pension is well taken care of. In addition, I want to start investing money myself in order to retire earlier. I think we have to work until we are 70, which seems too long to me. My dad is about to retire and he and his girlfriend are planning to travel across America in a motor home, which I think is a great way to retire.”

What do you worry about when you think of the future?

“Polarization, and I think social media plays a big role in that. If I like pictures of people who say grass is purple instead of green, it causes me to only see content from people who think that too. That filter bubble provides a distorted picture of reality, which worries me. I’m afraid of the consequences.

What also worries me are the waiting lists for mental health services. People who need help - and there are more and more since the pandemic - have nowhere to turn. I live in a project with many permanent residency card holders who have been through the most horrible things. Many of them are struggling with traumas, but are not getting any help. When things go wrong, as a society, we cry out: ‘You see, it’s always those refugees’. But we should look in the mirror and as a society we should make sure that these people receive the help they need. These prejudices really bother me too. I am often asked if I don’t feel unsafe in my neighborhood, because many young men with a migrant background live there. No one ever asked me that when I lived in a working-class neighborhood in Amsterdam-North. I feel very safe here. If something were to happen to me here and I were to scream, I’m sure those guys would come running out of their units to rescue me.”

What makes you angry?

“Injustice. For example, it makes me very angry that women are still 2-0 behind in the labor market. That is trivialized with the argument that it is our own fault, that we like working part-time. But that is not the core of the problem. I’m not very happy about the loan system either. I think it’s totally archaic for people with less income to have less access to education. Because you can pretend that the student debt doesn’t matter, but try to find a house in this housing market later on, if you and your partner both owe 40,000 euros in student debt. And even without that debt it’s already impossible to do, especially for people with a modest income. The gap between the rich and the poor is only getting bigger.”

What stands in the way of your dreams?

“Policy choices. That as a society we are choosing to cut back on healthcare, that housing prices are skyrocketing, and that you can no longer go to college without incurring big debt. But it can always be worse. My friends in Brazil have to deal with corruption and a leader like Bolsonaro. For them, it’s even harder to make their dreams come true.”

What are you doing to make your dreams come true?

“I don't shy away from difficult conversations, I work hard and I am committed to the community organizations and causes I support.”

And what are you doing for a better world?

“I try to eat a lot less meat and I only buy second-hand clothes, with the exception of sportswear and underwear. In that respect, I really am a millennial. I also encourage others to go for their passions and ambitions and not to let themselves be led by criticism from others. That makes the world a better place too. I want people to know that failure is part of success. In the Netherlands, failure is seen as a bad thing, but you can’t become successful without falling down a few times. You learn a lot more by falling down and getting up than you do going up in one straight line.”

Don’t you want to go into politics?

“I get that question a lot. No, not right now, but I’m not ruling it out for the future. I secretly think the business world has much more power than politics. Many politicians start with the best intentions at the Binnenhof (Inner Court), full of passion to make a difference, but then find themselves in such a snake pit that it becomes difficult to live up to their ambitions. It may be easier to really change things in the business world.”

In honor of the anniversary edition of Pride Amsterdam, APG is raising the rainbow flag at the offices in Amsterdam and Heerlen. As an employer of three thousand unique individuals, we are clearly showing that we want to be a diverse and inclusive organization in which fund clients and participants can recognize themselves too.

APG’s diversity and inclusion policy cannot be summed up in a few words. Activities range from signing various national manifestos such as “Diversity in Business” and “Talent to the Top” to establishing a Diversity & Inclusion (D&I) Board, organizing employee meetings and closing the gender pay gap.

Support
By raising the rainbow flag at several APG offices, APG is reinforcing its statement to promote diversity and inclusion. Something that makes Erik van Dam, reputation manager at APG, proud. “This gesture means more to me than I thought. Showing the flag feels like support that I can be who I am and that this is possible at APG. Especially considering that in the outside world, unfortunately, this issue still needs so much attention. At APG, I have rarely felt an inhibition to be myself. And yet I only know a handful of coworkers from the LGBT+ corner. So, there are still steps to be taken at APG in the area of diversity and inclusion. Hopefully the flying of the flags will make everyone more aware of their role in this.”

Aim
Ronald Wuijster, a member of the executive board and also chairman of the D&I Board, acknowledges that more steps can be taken to become an inclusive employer. But he is also proud of what has already been achieved. “We believe it is important that all employees feel involved and valued for who they are as professionals and as people. After all, being able to be yourself at work is important for everyone. In recent years, APG has already made considerable strides and the bar remains high. For example, we are aiming for at least 30% women at the top of the organization and 40% across the entire organization by the end of 2022.”

Progress
In addition to the rainbow flag, APG is also introducing a specially designed rainbow logo today. This consists of the original rainbow flag along with the five colors of the Progress Pride flag, which has a greater focus on inclusion and progress. Wuijster: “While the flags are flying outside, the logo reflects our sustainable identity and the values we want to show as a company online and on social media With this logo, APG is supporting unique individuals and underlining that progress is needed. We hope to contribute significantly to a sustainable future with this.”

Current topics with regard to the economy, responsible investment, pension and income: every week, an expert at APG provides a clear answer to the “Question of the week”. This week: Asset Management professional Steve Goossens discusses the impact of climate change and environmental disasters on real estate investments.

Hundreds of millions of euros: this amount alone represents the damage caused to the city of Valkenburg when the surrounding region was hit by severe floods in mid-July. This says a lot about the total financial impact of the flooding – and environmental disasters in general. Due to climate change, crises like this are becoming more frequent as well as more severe. With all the consequences – and damage – that this entails. To what extent does this affect investments in both the short and long term?

“The impact of climate change on investments is bigger than you might think,” says Goossens, who works in the real estate asset class. And he should know. Together with his team and co-workers from the Responsible Investment Team, he has been focusing on climate-related risks concerning the investments made by APG’s fund clients for more than two years now, primarily for his own department: real estate investments. “If at all possible, the data I collect will also be used in relation to investments in other areas, such as infrastructure.” After all, the impact of natural disasters is not limited to real estate alone. Goossens also examines risks associated with floods, forest fires, droughts, or rising sea levels in relation to real estate, for example. “Look at Amsterdam: droughts have been causing the piles on which the city is built to be exposed above water level for long periods of time. This, in turn, causes the wood to rot and the ground to subside more quickly. This is accompanied by an enormous investment task, which has a direct impact on some real estate investments in Amsterdam and the surrounding area.”

Direct and indirect risks

Goossens distinguishes between two types of risks related to climate change on investments: direct and indirect risks. The subsidence in Amsterdam, the flood damage in Limburg, as well as the devastating effect of forest fires on homes elsewhere in the world are all examples of the direct impact that climate change has on investments. “This is quite easy to explain: investment properties suffer damage and part of the costs in relation to this will always be borne by the investor. That, in turn, affects an investor’s returns: the higher the costs, the lower the return.”

Then there is indirect damage: “When a disaster occurs, stores may need to stay closed or hotels may not be able to receive guests, which brings certain costs with it. A natural disaster may also force people to move. Not only that: insurance contributions, for example, will also be subject to considerable increases in response to environmental disasters, or certain types of environmental disasters will no longer be covered by insurance. Property owners pay the price of this. Insurers, like us, estimate the risk of disasters like these and base their prices on that. You can count on insurance contributions becoming much higher in the future.”

Transition risk

Goossens therefore also draws up risk estimates for the investments APG makes for its funds. This is urgently needed, because it enables estimates to be made of the financial consequences of climate change in the longer term. Investors take this into account when estimating the value of an investment. At least as important is what is referred to as the transition risk: “This is the risk of rising costs in response to the energy transition. In other words: what additional investments are needed to achieve the goals of the climate agreement? Better insulation or new heating systems are examples of this. Climate change is causing the Earth to heat up faster. If we want to combat this and limit the ensuing rise in temperature to 1.5 degrees, as stated in the agreement, this will bring certain costs with it.”

Legislation & Regulations

According to Goossens, how much money and which investments are needed in the coming years also depends on legislation and regulations. The requirements set by governments for energy labels is a significant factor in this. “We have no influence on that, but we do know what the ultimate goal is for 2050 and that we need to keep reducing the amount of CO₂ we emit.” APG and other large investors have developed the global CRREM standard to measure the transition risk and, in doing so, gain a clear overview of that ultimate goal. This provides insight into whether a real estate investment complies with the Paris Agreement. An office building in the Netherlands complies with the climate agreement if it consumes no more than 14 kWh/m² of energy, for example. CRREM is stricter with regard to this than the Dutch Green Building Council (the network organization for sustainable construction practices), which applies 50 kWh/m2 as a standard, says Goossens. “Aside from that, the CRREM standard is scientifically substantiated. By applying this standard, we go much further than other organizations in the sector."

“Our calculations allow us to estimate what it will take to meet the goals at individual investment level. We then examine the various aspects involved in relation to our long-term real estate investment plans.” Goossens believes that these additional investments are necessary. “The alternative is that the Earth will heat up by more than 2 degrees and that even more environmental disasters will occur. The damage caused by that is many times greater than the cost of accommodating the energy transition.”

The Rolling Stones, Bruce Springsteen, Coldplay and Pink: they all performed here. The Malieveld was their outdoor concert hall. That said, protesting trade unions also regularly take over the “Haagse grasveld,” the famous field in The Hague. There’s no doubt that Tuur Elzinga has also left many footprints in that field. His history with the trade union movement stretches back to 2002, when he was appointed as a policy officer at the Netherlands Trade Union Confederation. Almost twenty years on, he is now chairman of the trade union and employers’ and employees’ organizations since March 10 of this year, to be precise. He also represented the Socialist Party (SP) in the Upper House of the Senate for nine years. This means that he is as familiar with the green polders of the Netherlands as the green benches of the Senate.

Getting fat on the bones

Elzinga believes that things need to change in the Netherlands. In his opinion, the pandemic is a tipping point: the market-driven approach that has gone too far must make way for a revaluation of society. The pandemic has revealed how indispensable certain sectors are to our society, like health care, education and childcare.. “It is precisely those vital sectors that have fallen behind in recent years,” Elzinga reckons. Schools, hospitals and kindergartens have been run like businesses, and cut backs have been the order of the day. This has led to a shortage of ICU capacity, protective equipment and staff during the pandemic. “We need to get fat back on the bones again; we need proper reserves. That may not be very efficient, but it stops the whole of society from grinding to a halt when times get tough.”

Fears for the future 

The pandemic has also widened the gap between the poor – those with few prospects – and the rich. The Netherlands has become more prosperous in recent decades, but not everyone has benefited from this. The flexible labor market has put permanent jobs at risk and wages have not risen enough in line with profits. “Inequality has widened, and imbalances have occurred,” Elzinga tells us. Not to mention the climate crisis, from which there is no escape, both literally and figuratively, as we face extreme weather, forest fires and floods across the planet. Elzinga points out that this leads to unrest. “People are concerned about their own future and that of generations down the line. As a country, your sole aim may be to make as much money as possible, but what kind of home will we be leaving to our children and grandchildren if social cohesion is under pressure and our planet is being eroded?”

Plus another one million permanent jobs

Fortunately, the pandemic has also prompted politicians – from left to right – and some employers to realize that the Netherlands of Tomorrow demands change, believes Elzinga. He believes that we can start rebuilding the country without delay. We already have the blue print: broad-based prosperity for the whole of the Dutch population. That is the approach underlying the Social and Economic Council’s draft advice that trade unions and employers presented together this spring: a package of measures for the new cabinet. First and foremost, the labor market must be reformed: we must return to more permanent contracts, instead of flexible employment. Elzinga would like to see at least another one million permanent jobs. “People need job and income security. They want bread on the table, they must be able to pay the bills and have enough disposable income for their leisure time.”

The climate change price tag

Broad-based prosperity also calls for greater investments in public funds for vital sectors, like health care and education. For example, better terms of employment must stop the trend of having unmotivated employees: it may be more enticing to get out of bed in the mornings and take up the task of teaching if wages rise and work-related pressure is reduced. More must also be invested in the quality of public services, such as the Employee Insurance Agency, the tax authorities – here we have in mind the childcare benefit scandal – and yes, also pension administration. Elzinga says, “Better performance from institutions may also help to close the current gap in confidence.” For the long term, there needs to be substantial investment in tackling climate change. “We have to stop procrastinating and start addressing the issue. The longer we kick the can down the road, the higher the price tag will be.” So we need more funds to accelerate the energy transition, while at the same time being socially accountable by helping people who lose their jobs to get other work.  

Strong government required

Given the long societal wish list, the government can no longer keep its distance, Elzinga believes. Since the eighties, the maxim in The Hague has been: strong market forces, small government. “A market is a good for ensuring that there is enough to round, but you can’t leave everything to market forces,” Elzinga reckons. “We are now faced with the mess that the mantra of liberalization, privatization and deregulation has left us in.” Rebuilding the Netherlands calls for a stronger state, one that actively helps shape the society of the future through public participations and targeted investments, and legislation and regulation must ensure that market participants accept their social responsibility. This need for a government with a firm hand on the rudder does not stop at the borders. For example, Elzinga welcomes the G7 plan for a global minimum tax rate of 15 percent for multinationals. It will make tax avoidance through tax havens more difficult because it will put an end to competition among countries that lure foreign investors by having the lowest tax rates.

Tech giants

It is also crucial to have international regulations that curb the influence of Big Tech and Big Data. Elzinga adds, “Big tech companies are capitalizing on data that we as consumers are producing ourselves. They are using existing digital infrastructure, without giving anything in return.” The same is true of multinationals that are getting patents for innovations that they were not solely responsible for conceiving. After all, their smart employees are educated at publicly funded universities and draw on the body of knowledge that our knowledge-based society has accrued in centuries past-. We are standing on the shoulders of giants. “Data, knowledge, but also for example raw materials and energy sources such as the sun and wind and ultimately our entire planet: it belongs to all of us. What gives a handful of companies the right to claim ownership? Why should managers and shareholders be allowed to become wealthy beyond description from it, while employees and the rest of society have to make do with the crumbs?” says Elzinga.

“Give employees control”

The pyramid must be turned upside down. That doesn’t call for revolution; instead it calls for a radical change in direction, through gradual, democratic means, according to Elzinga. He believes that the first tentative steps down this new path have been taken. Governments are slowly starting to take back their traditional role, companies are taking more responsibility for their environment and consumers, citizens and major investors are more inclined to hold them to account. The next step is to give employees and society a real say, Elzinga argues. “'Give those people who come up with all those innovative ideas a voice, the ones that do the real work, who are the actual rightful owners of companies’ products and services: all of us, in other words. Who’s the boss? Who decides? As it stands now, they are managers and shareholders; in the future we should all be able to be in charge.”

From shareholder return to social gains

In recent years, Elzinga has been conducting the negotiations for the pension agreement on behalf of employers’ and employees’ organizations of the Netherlands Trade Union Confederation. It’s a historic agreement; designed to keep old-age provisions affordable going forward, without abandoning the principle of solidarity. “In the new system, the contributions you have accrued are reflected more directly in your own pension accrual, but we will still ensure that people who are not so fortunate in their careers will also be able to have a good pension, and we will spread the risks across the generations.” That said, Elzinga believes that the pension discussion is far from over. If interest rates remain this low in the coming years and investment returns structurally decline in the future, as predicted, then it will not be possible to keep the promise of an indexed-linked pension and the trust gap in society will widen. Pension funds could then take the next step: from shareholder return to social gains.

Pension benefits in kind? 

Elzinga explains, “Pension funds should examine the needs people have later in life. Do they then only need money? Or would they rather have a nice place to live, good care and quality of life? Invest in that directly as a pension fund; put pension money into new kinds of housing for senior citizens, good care for the elderly and restoring social infrastructure, so that it is to hand when people need it.” This would be a type of pension in kind. And why only invest in provisions for old age? Pension funds can also be used to improve today’s society. Here we have in mind investments in the tight housing market – which mainly affects young generations – or in good education, for a robust Netherlands of Tomorrow. Elzinga adds, “Pension funds have major assets and that means they bear a huge responsibility, for the Netherlands of today and the future.” 

An end to strikes

During the pension agreement negotiations, the Netherlands Trade Union Confederation, together with the National Federation of Christian Trade Unions in the Netherlands and the Trade Union for Professionals, halted train traffic for a day to apply pressure for a slower rise in the state pension age. What does Elzinga think: will there still be strikes in the Netherlands of Tomorrow? “I suspect so. In the meantime, there will be conflicts of interest between employers and their workforces. But I hope that one day it will no longer be necessary to strike: if employees are given a real say, they can be part of the decision-making process and conflicts of interest will become a thing of the past. If you are the boss, there’s no need for you to strike.” So the Malieveld of the future will be solely for the successors of The Stones and Coldplay, in other words: the ultimate festival grounds? Elzinga laughs, “Yes, that’s where we’ll gather to simply have a good time, do stuff we enjoy or celebrate together, for example, the great pension system that we have in the Netherlands.”      

APG publishes Responsible Investment Report

In 2020, APG has once again made great strides when it comes to responsible investing. By continuously improving, we can continue to meet the growing sustainable ambitions of our pension funds, as shown in our Responsible Investment Report (Dutch; English version expected in July) published today.

Responsible investing is one of APG’s strategic pillars. In their preface, Annette Mosman (CEO), and Ronald Wuijster (board member responsible for asset management) note that the Covid crisis has accelerated the increased attention for responsible investing. "Not only among NGOs, but also in the media and among the participants of the pension funds for which we work. We listen carefully, because we realize that our right to exist derives from the participants. It is for them that we work towards a good pension."

Investing in sustainable development

By the end of 2020, we had invested over €90 billion on behalf of our pension funds in companies and projects that contribute to the Sustainable Development Goals (SDGs). These were drawn up by the United Nations in 2015 to create a better and sustainable world. Our pension funds ABP and bpfBOUW both have a target for investing in the SDGs. A significant part of our investments in the SDGs (€12.2 billion) consists of labeled bonds. These are bonds issued by companies, governments and organizations to finance green, social or sustainable projects.

In 2020, APG, together with three international investors, established the SDI Asset Owner Platform to stimulate investing in the Sustainable Development Goals. Our ambition is to make this a global standard. In this way, we - together with other responsible investors - can contribute to goals such as sustainable cities and communities, affordable and clean energy and climate action.

Combating the Covid-crisis

By the end of 2020, APG had invested more than € 1 billion in so-called Covid bonds on behalf of pension fund clients. The proceeds of these bonds are used to combat the pandemic and the impact of the lockdown on people and businesses. Examples include the expansion of health care services, employment retention programs and support for SMEs.

In 2020, we also urged companies – both individually and together with other large investors – to mitigate the social consequences of the crisis and put employees’ health first. According to the U.S. organization Responsible Asset Allocation Initiative, APG is among the global asset managers that do the most to address the effects of the pandemic.

Global warming and the energy transition

The carbon footprint of our equity investments decreased by 39% against the 2015 base year. All our pension funds have a carbon reduction target. This year, for the first time, we also publish the carbon footprint of our corporate bonds, real estate and private equity investments (57% of the total portfolio). By 2022 at the latest, our pension funds will link these to 2030 climate targets. APG has contributed to a framework for reporting carbon impact as well as an overview of methods used by the Dutch financial sector for measuring the carbon footprint.

At the end of 2020, we invested €15.9 billion on behalf of our pension funds in the Sustainable Development Goal 'Affordable and Clean Energy' (SDG 7). By investing in this goal, we reduce climate risks in our investment portfolio and contribute to the energy transition.

Impact on risk and return

In 2020, we developed a method that provides insight into the effect of including (taking sustainability aspects into account in each investment decision) and excluding investments on the return of the equity portfolio. Over the past two years, the effect has been marginally positive. We do note that we can only make statements about the long term if we have measured over a longer period of time. In 2021, we will also develop methods to assess the impact of other instruments for sustainable and responsible investing on risk and return, such as carbon footprint reduction and investing in the SDGs.

Our own business operations

Although APG can achieve the greatest impact with the investments we manage for our pension funds, we also take into account our own business operations. We can only set a high bar for companies in which we invest, if we do the same for ourselves. In this way, we also motivate employees to consider sustainability in their daily work and choices. By 2030, APG wants to have a demonstrably climate-neutral business. In order to enable decision-making on our sustainable ambitions, we will establish a Sustainability Board under the leadership of CEO Annette Mosman. More on this in our annual report.

Sustainable future

APG invests over €570 billion on behalf of its pension fund clients ABP (government and education), bpfBOUW (construction), SPW (housing associations) and PPF APG, the pension fund of our own employees. Our pension funds have strengthened their responsible investing ambitions and objectives. ABP announced its new policy in 2020; bpfBOUW and SPW have recently done so. In line with our clients’ increasing ambitions, APG continues to develop in the area of responsible investing. We want to 'work together on your sustainable future'. A future with a good and affordable pension, in a sustainable, livable and inclusive society. That is what we are committed to, now and in the future.

But he did not kill her,

Because between dream and action,

Laws stand in the way

And practical objections.

(from: Willem Elsschot, The Marriage)

Retirement may be something not directly of interest to Generation Z, but they are tomorrow's generation. What are their dreams? What are they doing to achieve them? And what stands in their way? In the Dream and Action series, we ask young people to talk about what it will look like for them now and in the future.

Leila Jane Ali-Dib (23) from Rotterdam: "People with a non-Dutch background have fewer opportunities in life. I get angry about that."

Who: Leila Jane Ali-Dib (23), "creative, independent, sensitive, caring, always curious and a feminist".
Lives: In Rotterdam.
Works: As a freelancer in marketing and PR, she also does modeling and hopes to get some acting jobs. "Work is very important to me. I also enjoy working on my career. I really like to work hard. Not just for the money, but also for the pleasure it brings me. Pleasure comes first. I think it's important to experience enough freedom in my work. I want to decide for myself when I work, what I do and when I do it."
Loves: Being creative, experiencing culture, traveling and spending time with good friends.

What are your dreams?

"I try to live in the now and see what comes my way, but in a way, I'm also concerned about the future. What do I want? Who do I want to be? What else do I want to do? I hope that later, I will have a family and a nice house in Rotterdam. And that my work is still my passion, and that I earn enough. I always want to keep doing my own thing and do and learn new things. I dream of seeing a lot of the world and doing more acting."

What does your dream retirement look like?

"As an employee, I have built up some pension, but nothing to write home about. To be honest, I haven't bothered with it so far. But as a freelancer, I'll have to arrange it myself. My mom always insists I have to sort it out. I don't know anyone my age who's already making plans for their retirement. It's still so far away. But then again, the sooner you start building up the better, so I'll have to look at the possibilities."

What stands in the way of your dreams, what are you worried about?

"I worry about the environment, but also about inequality in the world. There is a lot of polarization. I find it worrying how differently people look at things. I think everyone has prejudices, but I try to be aware of how I think and act. If someone I know says something politically incorrect, I try to say something about it."

What makes you angry?

"We often say that we've come so far, that so much has already changed, that the Netherlands is a free country where a lot is allowed. But if you look at what actually happens, it's disappointing. It's 2021 and women are still paid less than men. People with a sexual preference that falls outside the 'norm' are still verbally abused in the street. People with a non-Dutch background have fewer opportunities in life. I get angry about that. Sometimes I don't understand how it's still possible, in this day and age."

Have you ever had to deal with that yourself?

"No, as far as I know, I've never been discriminated against because of my surname. Maybe because I don't look very foreign. I am half Arab; my mother is Dutch, my father is from Syria. What did once happen is that because of my background, I was deliberately put in a kind of subsidy application for diversity. I thought that was mad, although I could laugh about it too. Spurious diversity is also a problem: companies that pretend to the outside world that they value diversity, but behind the scenes everyone's white. I think there is still a lot to gain there."

What do you do to improve the world?

"I try to be environmentally conscious. I believe it's important to be informed about this, to find out more and more and to make more conscious choices. Two years ago, I cut meat from my diet and I eat as little fish and dairy as possible. I'm also more conscious about clothing. I give old clothes away to people I know or sell them online so that someone else can still enjoy them. I try to buy more second-hand, because apparently, certain large clothing stores do not produce those clothes sustainably. I've heard that returned clothes often have to be incinerated because that would be cheaper than recycling. This also has to do with our buying behavior, so we should not close our eyes to that.

When it comes to flying, I'm a bit less environmentally aware if I'm honest. I once looked into whether I could go to Spain by train instead of by plane, but a train ticket was more than twice as expensive. And it takes much longer to get there too. I'm sorry, but in that case, I'll take the plane."

But he did not kill her,

Because between dream and action,

Laws stand in the way

And practical objections.

(from: Willem Elsschot, The Marriage)

Retirement might not be something generation Z spends much time thinking about, but they are the generation of the future. What do they dream of? What are they doing to achieve that? And what is standing in their way? In the series Dream and Action, we let young people speak about what the present and the future look like to them. Today, freelance copywriter Nina Keijzer (20) from Ridderkerk: “What do I worry about regarding the future? It would be better to ask: what don’t I worry about?”

Who: Nina Keijzer (20)

Lives in: grew up in Rotterdam, currently lives in Ridderkerk with her parents.

Works: as astrologer and copywriter. “My work is the most important part of my life right now. It keeps me busy every day. I get that from my parents. They both always worked full-time, just like my grandparents; it’s our nature to work really hard.”

Likes: writing, reading, working out, watching Netflix and playing piano.

What do you dream about?

“I’d like to publish my own books. If at all possible, I’d like to mean something to society that way, make a difference. If I can help someone in some way, I am satisfied. To me, being successful is the freedom to do what you enjoy doing. Sure, it’s nice to have a lot of money too, but it’s not the most important thing.”

How do you envision your future?

“I really think about my future too much. More than I want to. I talk about the future every day with my best friend. You’re still young, people say, don’t worry. And that is true, but we can also see that things are not getting better. How can you not worry when you have a huge student loan to pay back and you have no chance of getting a mortgage? I don’t see it happening, but I hope to be able to move out and buy a nice house for myself in about five years. In a perfect world I would not have any money worries, I can accrue a nice pension and I don’t have to worry about the future.”

What about when you are retired?

“I’m not looking forward to still having an office job and still working hard when I’m 70. I’d rather retire sooner. A passive income would be nice. If I stay self-employed, I will have to set up a pension for myself. That is something I’m already worrying about. Life just keeps getting more expensive and wages don’t seem to go up at the same rate. If houses get even more expensive, how are we going to pay for that? My generation is really into investing; you’re suddenly seeing that everywhere. I want to do it too. I hope I will be able to save enough to be able to sit in the garden without worries in my old age. But money might look very different in fifty years. That may sound like science fiction, but we already have bitcoin and other crypto coins, so the idea is not that far-fetched.”

What is your dream for the Netherlands?

“We work a lot in the Netherland. It would be great if that changed; that we start working less for the same money. It would be a nice experiment. Everyone wants to work less for the same amount of money. You might get as much done in 30 hours as you do in 40 hours, because you only have a limited number of productive hours in a day, and you can’t be focused non-stop. It could also make a big difference in terms of burnouts. I enjoy my work and it is important to me, but the balance between work and leisure should really be more towards leisure. I think that my generation is very aware of that: you only live once and there is more to life than just work.”

What kind of world would you like to live in?

“I hope that big companies and countries will want to take more responsibility. A lot still needs to be done to reach the climate goals. It is a serious matter, which in my eyes is being treated much too casually. It’s great we want to go to Mars, but let’s take better care of the Earth first.”

What worries you when you think about the future?

“It would be better to ask me what doesn’t worry me. Climate change is on my mind a lot. What if it makes the sea level rise even higher in the Netherlands? And I watched a documentary where they were saying there won’t be any fish left in the sea by 2050 if the fishing industry keeps going at the current rate. That scares me. I should hope there will still be fish in the sea by the time I’m 50. What are we going to do now to prevent that?”

What stands in the way of your dreams?

“The housing market worries me. How on earth am I ever going to get a good mortgage? The price of houses is rising like crazy in the Randstad and everything is selling above the asking price. My generation and the generation after me will have to bring at least 20,000 Euros if we want to buy a nice house. My mom lived on her own when she was 18. She rented apartment for 250 guilders a month. When I hear that, it makes me want to cry. You can’t get anything like that for even 500 Euros in the Randstad now. We can’t keep going this way. Soon we will still be living with our parents well into our thirties, because we can’t afford to buy our own homes.”

Are there any other obstacles?

“Yes, we also have huge student loans to pay off because they stopped providing the basic study grant. Some of my friends owe 60,000 Euro and they have no idea how they are going to pay it. Everyone thinks my generation is all about having fun, but my friends are working like fiends to be able to pay for everything. People forget how expensive everything is; even just renting a room costs a lot of money. It would be wonderful if they brought the basic study grant back. That would eliminate so much stress. We are the future and governments should invest in the future.”

What are you doing for a better world?

“My parents and I are very consciously working on sustainability. We don’t have any plastic shopping bags and bottles of water anymore, we throw away much less than we used to and buy organic whenever possible. We are also all vegan, we only eat plant-based food. My mom became a vegetarian when she was 14. I became a vegetarian when I was 15, but a few months later I decided to go vegan. Both of my parents said, okay, we’ll do it too. I’m very grateful for that. Even my dad quit eating meat, dairy and eggs cold turkey. Plus, every day, I go for a walk and pick up any garbage I come across on my way.

One person can make a difference, but at the same time, I think that the responsibility is put on the individual too much instead of on the big, polluting companies. I hope that is going to change in the coming years. Because we can all stop buying plastic straws, but as long as cucumbers are all sold individually wrapped in plastic, that is not going to make that much of a difference. I also think it’s too bad that sustainable is often more expensive. That makes a lot of people go for the less sustainable options.”

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.

Continuous improvement

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.”

Carefree retirement

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.”

Unfair system

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.”

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.”

Sustainable ideas

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.”

Phased retirement

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.

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 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.”

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.”

View the Annual Report 2020 here. 

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 6^th. 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.

"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."  

"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.

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.

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."

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.
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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.”

“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.”

Sharing knowledge

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.”

America

That’s something the people in a country such as the United States can only dream about. With a ranking at the 16^th 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 14^th 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.”

Reforms

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:

https://apg.nl/nl/publicatie/ontwikkelaar-nieuw-pensioenplatform-apg-gaat-zelfstandig-verder/

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.”  

Reducing disparities

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.

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.

Also see: https://nos.nl/artikel/2348194-koopkrachtcijfers-zeggen-niet-of-jouw-koopkracht-omhoog-of-omlaag-gaat.html

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.

Unique location

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.” 

Strong formula

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.

Inclusive

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.”

Reflection

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.”

Man/woman

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.”

Equal burden

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.

Certificate

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

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.”

No complacency
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.

Expanding scope
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.”

 

Read the entire Dutch interview with Francine van Dierendonck in the NRC here.

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