“Our ambition is to lower cost for every participant”

APG has had an eventful year. The successful transfer of the Work and (Re)Integration Pension Fund (PWRI) and its own pension fund, PPF APG, to the new pension regulations was an absolute highlight, says APG CEO Annette Mosman at the publication of the 2024 annual report. On the other hand, 2024 also ushered in a new era for APG with the announcement of the development of Strategy 2030, new investment mandates, and a sharp focus on costs.

“It makes me proud that we were the first administrator with a substantial number of participants to switch to the new system,” Mosman says at the start of the interview. She feels that the new system and the transition of PPF APG and PWRI to the new pension rules obviously left a very significant mark on 2024. “The preparations have taken years, and now that it’s happening, it is intense. Especially because we have simultaneously opted for a new policy and administration system. But everything has gone smoothly, without any significant complications.”

In addition to the transition, APG was also busy with other things in 2024. How do you keep your focus?
“There is a lot going on in geopolitics, our clients are on the move, and artificial intelligence is on the rise; in these times, it is a director's job to keep things in order. As the board of directors, we have done this very clearly by making the transitioning of the funds we work for the top priority. Now that the first funds have been successfully transferred, we are already busy with the funds that will be transitioning to the new regulation in 2026 and 2027. We will incorporate the lessons learned into this next transition. In addition, there is now room for the development of Strategy 2030, our financial model with cost savings and a focus on digitalization.”

Strategy 2030 is being developed based on the long-term vision for outsourcing that ABP presented at the end of 2024. According to those plans, APG should operate as a single client for asset management and as a multi-client for pension administration and communication. What is the status of this plan?
“We will use most of 2025 to draw up the APG strategy for 2030. The execution will start in 2026, but in the first years, the focus will remain on transferring the funds to the renewed system. Parallel to the implementation of the Future of Pension Act (Wtp), we will begin to take the first steps towards realizing our ambition for 2030. This could include changes at APG Asset Management based on our clients’ new investment beliefs and cost savings. We will only do this where there are no risks to the transition.”

Cost savings were an important priority in 2024. How do you look back on that specific aspect?
“Our costs are mainly due to IT and employees. Due to the transition, we currently have a dual organization, which is based on both the old and the new legislation. That will change. Major transitions are coming in the future. We will always need investors, actuaries and lawyers, but we will have to organize ourselves differently due to the rise of artificial intelligence and because pension funds require us to do so. We prepared for this in 2024. For example, we reorganized the Marketing & Proposition department. We asked ourselves critical questions: what services do we currently provide, what costs do we incur and what is the corresponding turnover? We no longer provide services that we can’t sell anymore. We are becoming more businesslike. It is no longer a case of ‘you ask, we deliver’. Services that clients demand from us come at a price.”

The annual report shows that in 2024 the cost price per participant was 128 euros. How satisfied are you with that?
“Many costs are now being incurred due to the transition and due to investments for a healthy APG after the transition. Despite these costs, the increase in the cost price per participant in 2024 will be only 11 euros. Those 11 euros can be attributed to the transition costs; the costs of regular services remained the same, while wages and prices rose. The costs for regular services thus decreased in real terms. Our ambition is to lower the average cost per participant to a market-based level after the transition to the renewed pension system. This is possible if our pension fund clients simplify the schemes, APG continues to digitalize, and we implement a generic method in the implementation processes.”

What is in line with the market?
“If you look at the current market averages, APG is still above that with our cost price per participant, taking into account our economies of scale. We want to become lower-priced but still deliver APG quality. It is very difficult to say what the cost benchmark will be after the transition. Every administrator and every fund is also in a different position in the competition. Of course, we all have operational costs and transition costs. But one administrator is holding on to their old systems, while we are choosing new technology and a new, integrated policy and administration system. We also don’t know how long we will have to let the old and new systems function side by side, how much aftercare will still be necessary after 2027, and what exactly the regulators expect of us. There is a great deal of uncertainty, which makes it difficult to say what a competitive cost price per participant is.”

How important is stakeholder management in everything APG is currently experiencing and striving for?
“Extremely important. We have an enormously diverse group of stakeholders in the sector and as APG; regulators, social partners, employees, funds, the accountability body of the funds, the Board of Supervisors, etc. The crux is that you continue to work together. The beauty of it is that by working well together, trust grows. And with trust you achieve results.”

According to the EU’s Corporate Sustainability Reporting Directive (CSRD), large non-listed companies must include a sustainability report with their annual report starting in the 2025 financial year. APG has chosen to start doing this as soon as the 2024 financial year. Why this choice?
“This is the APG method. Take, for example, our transition schedule for the renewed pension system. That was a deliberate choice. We are starting with the smaller funds and will move on to the larger funds later. We are learning first, which will benefit us when we move on to the other funds with larger numbers of participants. The CSRD is thinking along the same lines. Currently, implementation of this in the annual report is not yet mandatory, but it will be soon. Until then, we can learn. We know that when you translate a law into implementation, there will be discussions. It is rarely crystal clear. That is why we are starting early, thoroughly and professionally."

Read the full 2024 annual report here.