“Architects prefer to be engaged in their profession”

Funds director Monique Groenen wants to interest colleagues for their pension

The meeting of the board of Pensioenfonds Architectenbureaus (Pension Fund Architectural Firms, ed.) always starts with the question: What makes you lie awake at night? Director Monique Groenen – an architect herself – never has to look for an answer to that question as a lot is happening in the industry. The biggest challenge: sparking her colleagues’ interest for their pension. “Nowadays, we just post pictures of buildings with our messages to make sure it gets read.”

She just ordered 150 chairs. These chairs are intended for 150 toddlers who will all be gathered in one large space in their new school in the Brabrant village of Hapert. The (interior) architect Monique Groenen was given the task to design this mega classroom in such a way that the end result is a nice environment to learn and to play with good acoustics. A major challenge, as is the supply of the wood and sheet material needed: the war in Ukraine causes delays and price increases.

Selling Russian shares

As a director of Pensioenfonds Architectenbureaus (on behalf of the employers), Groenen is also confronted with the consequences of the Russian invasion in Ukraine. “We had a board meeting one day prior to the invasion. We always start with a round of: What makes you lie awake at night? I then expressed my concerns regarding the threat in Ukraine and presented the question what a war would mean to our pension fund. The next day, it was actually happening.” During the conference call a few days later, we made the unanimous decision to sell our interests in Russian governments and shares as quickly as possible. “That didn't require a lot of debate.”

Establishing a great pension construction

Architecture and the management of a pension fund: Groenen sees a parallel. “Being an architect, you have to deal with the demands of clients and in the pension world, with the requirements of the law and the social partners. You create a suitable design, together with other parties involved. You then supervise the execution by the ‘contractor’: the administrative organization. That's how you establish a great pension construction for the participants.”

Your participants are architects. What is typical for this professional group?

“We are not only working on behalf of architects. That's a misassumption as we work on behalf of all employees of architectural firms, meaning also for secretaries, illustrators and specification creators, just to name a few. This entails a diversity of professions with, by the way, mainly highly educated people. Architects are passionate about their profession; they do their job with love and enthusiasm. The danger is for clients to start thinking that your work is your hobby, while you obviously also have to make money. But the average architect doesn't really have a businesslike demeanor.”

That probably means they are also not very engaged in their pension…

“They are not thinking about their pension at all, and that applies to both participants and employers. We just finished a call action: every director talked to a number of employers in person to hear what's going on and to ask whether there was anything we could do to help them. But the subject pension appears not to be on their minds at all, architects prefer to be engaged in their profession. Or pension is considered an expense employment condition, a cost item, especially by smaller architectural firms.”

You are a member of the communication commission within the board; how do you succeed in engaging participants?

“It is hard to break through that disinterest, it's almost impossible. We try to make pension information as accessible as possible. We also gather email addresses to reach people better and to measure whether our messages are being read. We also started posting short messages on LinkedIn last year. But the likes we get, almost all originate from people in the pension industry, such as APG employees. We did notice that our posts acquire more attention if we supplement them with pictures of buildings, as that wakes up architects. That was an eyeopener. Subjects such as investing in real estate and responsible investments also appear to be more appealing than basic pension themes.”

Is that interest in sustainability caused because architects are often confronted with the discussion around nitrogen and polyfluoroalkyl/perfluoroalkyl substances (PFAS) in their work?

“Being an architect myself, I am actually never confronted with those topics. This unlike all kinds of rules regarding the sustainability of residences and buildings, which I believe is actually a good thing. In the industry, we are now mainly talking about insulation, self-shielded construction and energy-efficient installations. So, sustainability is important in our profession. Architects also believe it is important for their pension funds to be invested responsibly, as shown from a survey we conducted previously among our constituencies. We have therefore said, as a pension fund, that the objectives for sustainability in our investment policy had to become more ambitious.”

Do you still invest in fossil fuels?

“Yes, we use our equity interests to exert our influence on oil and gas companies. You no longer have a voice once you sell your interests. Our participants also didn't give us any signs that they want us to withdraw from fossil fuels. In response to the Russian raid in Ukraine, the board did discuss whether or not our investment policy should exclude certain countries if these countries violate human rights. Just like we exclude weapons and tar sands for example. However, we are consciously investing in sustainable real estate in the Netherlands. Not only does that mean the money of participants is invested responsibly, but it also generates employment opportunities within their own industry.” 

There is probably no lack of work at the moment, given the current madness on the housing market?

“That depends on the part of the industry you are working in as an architect. The housing construction is booming, yes, that is true. Many architects are extremely busy. But architectural firms aiming at, for example, hotels and theaters, have had some difficult years due to the Corona crisis. Not long after the outbreak of the pandemic, employers asked us to look at the pension contributions. Those contributions cannot be lowered all of a sudden, but we did temporarily extend the payment period.”

Weren't you afraid that some employers would eventually stop paying the contributions?    

“As the board, we kept a close eye on whether or not the firms met their obligations. Because even if employers are not paying the contributions, we still have to accrue pension for the employees as they are entitled to that. So, the board has to be very attentive. It is possible to deploy a debt-collection agency in case of non-payment and eventually even file for bankruptcy of the employer in question. Although that's something we'd rather not do of course. Luckily, the contributions were usually paid as normal during the Corona crisis and we were able to gradually shorten the payment period again. The consequences of the pandemic for the industry were less serious than we had feared.”

That was a quite different outcome than during the financial crisis in 2008. 

“Yes, that crisis hit the industry hard back then. It has led to many redundancies in architectural firms and the participant population even halved in those days. Ever since that time, we have many sleepers (people who are no longer paying contributions and don't receive a pension payment yet, ed). It is a challenge communicatively speaking: how do you keep those people involved in the pension fund and sufficiently informed? We often don't even know whether they are still working in the architectural industry or started doing something else. A part of the sleepers has become self-employed: as a result of the crisis, many employees of architectural firms started their own business. We don't really know because self-employed people are not affiliated to a pension fund. The industry has always shown a continuous inflow and outflow of employees. That makes our participant population quite volatile. Fortunately, the number of participants is slowly increasing again.”

Shouldn't self-employed persons also be able to arrange for their pension through your fund?

“We would like that, as we are now missing a large part of the industry in the pension provision. Employers’ association BNA wants us to investigate what possibilities the new pension system has to offer in that respect. But there are still many question marks and dilemmas. The employer pays part of the contributions for people with a permanent position, 55 percent in our industry. If self-employed people have to pay both the employee's part and the employer's part, would it still be affordable? Moreover, the income of self-employed persons varies, while the pension contribution is a fixed amount. So, would it be possible to make the payment of contributions flexible or would it be possible to settle the contribution afterwards based on the revenue, for instance? These are all questions that need to be answered.”

Part of the self-employed persons is not accruing any pension in the current situation. Should that be made mandatory in your opinion?  

“Mandatory pension accrual may ensure people to also have a good income in the future. On the other hand, I am struggling with the mandatory part of things. You may expect entrepreneurs to be able to make good choices on their own. It also depends on the situation whether or not it is necessary to take out pension insurance. Self-employed people may have a partner with a good income and pension, for instance, or they may have worked at an architectural firm before and accrued a proper pension there. The latter applies to me. So I didn't arrange anything for my pension in the second pillar once I became self-employed.”

Will you, as a fund, opt for the Solidary Contribution Scheme in the new pension system or for the Flexible Contribution Scheme? 

“That choice still has to be made by the social partners. In principle, the employees opt for the solidary scheme (the solidarity contribution scheme has more collective features, such as a uniform investment mix, and less freedom of choice. This contract form also includes a solidarity reserve as standard, ed.), the employers have no specific preference for a type of contract. They do want a stable contribution and more freedom of choice for the participants. The employers would also like to embed an opt-out variant: that variant provides more freedom of choice for the employee's part in the payment of contributions. As a fund, we are now making calculations to see how both contracts will work out for the participants in a financial sense. That might help the social partners in making their choice. Employers’ associations and trade unions are currently organizing connection sessions: they visit architectural firms to evaluate the opinion of participants on pension. As the board, we hope the social partners will made their choice with regard to the new system quickly. Only then will we be able to communicate on the new pension system with our participants. There is no point in communicating sooner; the interest is the industry for pension is already so low, you should only approach people when there is truly something to communicate.”

The board is composed of representatives of employees, pensioners and employers on behalf of which you were nominated. How do you cope with those various interests?

“Eventually, it's all about the participants and their future income. We have to handle their pension euros as good and as responsible as possible. That's what our discussions are about. A director is therefore not primarily promoting the interests of the constituencies he or she represent. I sometimes express the employers’ point of view, such as the importance of a stable pension contribution. Employers like to know where they stand. But the members of the board primarily have a common goal: to represent the interests of the participant. For example, it is our ambition as the board to index the pension whenever possible. We were able to do so again last year for the first time after many years, with 1.2 percent. It felt good to finally be able to bring some good news, although there is no reason to throw a party given the rising inflation.”
 

What motivates you to be involved in pension, as one of the few architects?

“Pension sounds boring but is actually very interesting. The pension world is in continuous motion and relates to all social developments. Think about sustainability, now the situation in Ukraine and the new pension system later on... My husband always says: I cannot believe how many meeting documents you must read as a director of a pension fund! But I like it and find it interesting. I hope I can contribute a little to enhancing the pension awareness of my colleagues this way. Making difficult decisions can be part of the job sometimes, that's true. It can make me feel uncomfortable at times, but people usually understand if you explain it well. That's something I have learned in the past years.”