The Pension Fund for Housing Associations (SPW) will switch to the new pension rules on January 1, 2026. SPW chairman Henk Jagersma acknowledges that the road to get there will have some bumps. “But none of them are insurmountable.”
What motivates the board members of the pension funds for which APG works? And how do they experience the current times, during which so much is coming their way? After all, many funds are transitioning to (or have already adopted) the new pension regulations. Additionally, their administrator is in the midst of a major transition. In this interview series, we engage in conversation with them. This time, we speak with Chairman Henk Jagersma of SPW.
SPW took an important step towards the transition to the renewed pension system at the end of last year. After finalizing the implementation plan and the communication plan, which is part of it, the fund received the green light from the Supervisory Board and the Accountability Body (VO). “After that, we sent the plans and the transition template to the regulators on November 1,” Jagersma explains. The implementation plan is with the Dutch Central Bank (DNB) and the communication plan is with the Netherlands Authority for the Financial Markets (AFM). “We have drawn up a working line with partial assessments with DNB. This promotes a smooth and gradual transition, as it gives us clarity on subtopics from DNB.”
How satisfied was DNB with your transition notice?
“They had some seventy questions and sixteen concerns. We were shocked, it was a real wake-up call. APG had not communicated with us about a number of issues that the forerunners PPF APG and PWRI had encountered. That was unfortunate because then we could have included it in our plans. But there were also new issues, such as how to deal with the balance assessment and how to formulate the risk attitude. So no, the additional insight had not changed anything. DNB therefore suggested working with partial reports. That is what we did. Data quality as a partial report in January, risk attitude in early February, and we will do the contract in a few weeks because it contains items that we need to coordinate with the social partners, the Supervisory Board and the VO.”
So there’s still quite a bit of work to be done.
“That’s true, but nothing is insurmountable. We expect to start transitioning on January 1, 2026, and we would love to have the green light after the summer so that we can thoroughly prepare ourselves and the participants for the transition. But that doesn’t change the fact that it is an uncertain process, partly in view of current political events.”
As a board member, how do you feel about the New Social Contract (NSC) proposal that participants in a pension fund should be able to vote in a referendum on whether or not they want to switch to the renewed pension system?
“I really don’t understand anything about that proposal. For a number of reasons. It is a huge pile of extra work in an already extremely complex transition process. It’s asking for accidents and failures. Why would you want to do that? Secondly; if we manage to organize it properly at all, and participants say they want to leave the existing arrangements in the old system, a number of things happen. We then face duplicate implementation costs. That comes at the expense of pension benefits. In addition, the new entitlements accrued through contributions have a longer average term. So you can invest those contributions with a higher risk and thus accrue better entitlements and pensions with them. If you look at the old scheme, where the population is aging, they have a shorter term and we will have to invest more risk-averse there. This reduces the chance of indexation and increases the option of discounts. I don’t understand what the advantage of that is. Moreover, this has been under discussion for the past fifteen years; everyone has had a say in the matter. We now have a really balanced scheme with solidarity reserves that help supplement pensions when investment returns are disappointing. If this happens, it would be highly unfortunate.”
What does the new plan mean for participants ages 40 to 67?
“At SPW we compensate for the effect of the elimination of the average premium, something that is obviously very important for that group. We need 4 to 5 percent coverage ratio for that. Yes, that is a lot of money. But we are going to do that.”
How do you experience APG’s role in SPW’s whole transition process?
“They are working tremendously hard with many very good people. But we’re also seeing a few cracks here and there.”
I wonder if those cracks might be related to the developments at APG. Asset management is going to have to opt for a possible single-client strategy. What was it like for you to receive that message?
“We saw it coming, but the timing is unfortunate. Why now and not four years earlier or four years later? Now it runs through the transition. As a board, you have to deal with it all. Just take the implementation of a new fiduciary manager; that takes preparation time. For us and for APG. We have to decide what we want to outsource and what parts of the portfolio we want to manage ourselves. We won’t start that process until we feel comfortable with the transition to the renewed system - and the work of finding a new fiduciary manager no longer conflicts with that first priority. So we are looking now at what can be done in parallel and what needs to move to 2026.”
In the future, APG may work with a two-tier model within pension administration. One for ABP alone and one for the other funds for which APG works. What do you think of that option?
“I am happy about that. In fact, we are very happy with APG’s pension administration. But anyway, how ABP ends up dealing with APG will be decisive. What can or can’t SPW do in terms of rights management and communication within that two-tier model? We have rolled out pilot projects in the past, which had good results at SPW in terms of communication - overview and insight, as we call it. We want to launch more such projects in the future, but there has to be room and capacity for that. But if ABP says or demands that the available capacity is theirs alone, then it gets complicated.”
How new is this dynamic for you?
“Most of it we haven’t experienced before. Not the transition, but also not the search for a new fiduciary manager. We did decide last year to transfer the real estate investments from APG to Amvest. We will complete that transition shortly. We have seen how much administrative work that required, which is another reason why I am quite concerned.”
Why would you not join another fund?
“Consolidation wouldn’t work for us. In our sector, the participants and various stakeholders are very attached to having their own fund. We have looked into this, but the conclusion was that it does not add much and offers few advantages. We are a fund with invested assets of 15 to 16 billion euros. That is big enough. Besides, you get the big economies of scale in pension administration anyway. The two-tier model is a good solution for us in that respect, certainly if the other seven funds for which APG works also join in. We are eagerly awaiting the details of that model.”
