“This is the year of truth”

Published on: 30 March 2023

Turbulent, that’s what you could call 2022. A year marked by the war in Ukraine, historically high inflation rates and an unprecedented rise in energy prices. There was also positive news: a majority in the House of Representatives voted in favor of the Future of Pensions Act. As the Annual Report is published, how does APG’s CEO Annette Mosman look back on 2022? And most importantly, what does she see when she looks ahead? “We have good momentum for the transition.”

When giving this interview, Annette Mosman has just returned from a visit to relatives abroad. But also to charge her batteries and get ready for the extremely complex operation that the transition to a renewed pension system will undoubtedly be.

What insight did you come back with?
Annette: “That above all, we should not forget to reflect on what we have already achieved and where we stand. This is the biggest pension reform ever, one of the biggest transformations overall, in the Netherlands. And that is a big deal, of course. You end up thinking about everything ten times. Do we have everything under control? But if you step back for a moment, you see: we have already come a long way.”

In March there was turmoil in the banking world; we read in the annual report that APG lost 18 percent in assets by 2022; and the criticism of the revamped system just keeps on coming. So then, what are you supposed to think?

“It is a double picture. On the one hand, there’s still that horrible war, there’s some turmoil in the banking sector, as well as the continuing high inflation that affects everyone in the Netherlands. On the other hand, I still keep thinking: we are investing for the long term. We are not set up for today’s wallet, but for the future. And as for investments: after many years of excellent returns 2022 was certainly not a good year, but fortunately 2023 is looking better so far. And at the same time, interest rates are also rising. As a result, the funding ratios of the funds have increased, which creates room for increasing pensions. And a higher funding ratio also means that you can fill your solidary buffer, but also that you have more options. For example, regarding the average premium. In other words, we have good momentum for the transition.”

Not everyone agrees. More than a thousand written questions have been posed in the Senate about the Future of Pensions Act. It looks like there is no end to the discussion. What do you think about that?

“I think that is remarkable. This is a law that has come into being over the last 15 years. Almost the entire pension sector supports this law proposal. A majority in the House of Representatives is in favor of it. It is a law proposal that builds on an agreement between the social partners and the polder. Many scientists and experts have looked at it. You can’t say we’ve rushed into this overnight. Then it is remarkable that those experts are repeating all the arguments we have already discussed with each other. It also strikes me that in the Senate we mainly hear the voices of opponents. I found the meetings quite one-sided in that sense, because there are also many supporters.”

And what is your conclusion?

“Apparently, it is challenging to speak out in favor of this law proposal. Of course, the new system also has disadvantages, just like the old system. But ultimately this is the solution that came out of the polder, and at some point, the Netherlands is going to have to support it. Therein lies my concern: all these discussions are creating unnecessary unrest among the participants.”

You’re not expecting the election results to cause delays?

“Of course, there is no denying that this is a political landslide. The fact is that a majority of the parties in the current Senate favor the Future of Pensions Act. And the schedule and expectation is that the bill will be completed before the change of government in early June. So, I am positive about the outcome and expect it to happen by the end of May. But politics are always unpredictable.”


Change is always scary. Especially when it’s about money. Is that not the reason for all that resistance?

“The interesting thing is: even in the current system, people think there will be nothing left for them when they retire. Then when they call our call center, you hear the relief. ‘Oh, so I really will be getting it.’ That seems to be part of retirement. I understand that the new system creates uncertainty. You know what you have and you don’t know what you’ll get. On top of that, most people think pensions are complicated. Which I dispute, by the way, because it’s basically just your paycheck of the future. Plus, it is a subject you don’t deal with on a daily basis. And then you hear in all kinds of reports that it’s not well regulated and impractical. That all adds up. But an important element of this new law is precisely that it puts an end to the false security of a fixed-value pension. We have not been able to index for 12 years. This is often overlooked in all the criticism of reform.”

Will communication become a crucial factor?

“We realize that in the new system, the fluctuation of financial markets will be much more visible to the participant and we will have to explain that. For APG, the transition means that 4.5 million people will retire in a three-year period. For them, an ‘intermediate balance’ will be calculated, that is transferred to their personal pension pot. We obviously have to be well prepared for that. If we had to answer all the questions live, we would need a call center with three thousand people. That is also why we are also busy optimizing a digital service-environment, think of chatbots, for example. Everything is geared towards being able to really help people as much as possible during that period, both live and digitally.”

The introduction of the “personal pension pot” is likely to increase pressure on funds. People want more information about what happens to their money. More influence, perhaps. What does that mean for APG?

“I see that mostly as an opportunity. There was never any interest in the retirement product, nor any contact, outside of life events such as getting married, changing jobs, etc. That is changing now and we need to grab that opportunity with both hands. There will be more contact moments, more questions. This will give us a better picture of what’s on participants’ minds and we are going to understand them better. I expect that participants, in turn, also understand better what’s possible and what’s not. People are going to be more involved in their pensions. Participants already increasingly want to know: what are you doing with my money? If they have their own pension pot, under the new scheme, with, say, three hundred thousand in it, those questions will come even more frequently.”

More transparency also means: more accountability. For example, when it comes to investments. You have to explain the choices you make to both supporters and opponents of sustainable investment. Is APG ready for that?

“This has been going on for years and is also the basis of responsible investing policy. I think the Green Deal will have the biggest impact, and I am referring in particular to the new financial reporting requirements for investors. The impact of the European SFDR-regulations will be huge. Because from now on we will have to show what impact all of our investments will have and how green they are. The discussion on this will certainly intensify as participants gain more insight. We have built up the competence of ‘how well do we know the participant’ considerably in recent years and we must strengthen that. And that’s why I always say: we are one APG. We combine knowledge of the participant - what do they want, what do they think, what is going on in society - with in-depth knowledge and expertise on investments and returns.”

Some funds, such as ABP, are global forerunners with their SRI policies. They are going faster than APG as a whole.

“That’s up to the funds; we provide advice on that. Data-driven advice. Getting out of fossil fuels is a logical step, but what investments do you make instead, and which ones will enable you to have an impact? We agree with the policy statements, and subsequently the question is: how are we going to execute them? And that’s what we can really help the funds with.”

Looking back at 2022: what went well and what could be better?

“During the walks I took with people from inside and outside the organization over the last two years, I learned that we need to delve even deeper into the dynamics of the funds and the social partners behind them. Listening to what the concerns are, asking questions before forming an opinion. APG employs professionals; very smart people who sometimes have too much of a tendency to explain things to others. We could be a bit more vulnerable in that respect. It will be a challenge to keep that up at a time when you are under high pressure, but it’s the only way. At the same time, I see that we can be very decisive, especially when this company experiences a crisis and the pressure is very high. Making clear decisions and getting through it. I’m seeing this happening in more and more places.”

How are you seeing 2023?

“This is the year of truth. We have been practicing for a long time, building a team and soon it will be time for us to deliver. That is going to be challenging. Investment-wise, the environment is becoming increasingly unpredictable. Both in terms of how the financial markets will develop and in terms of responsible investing. How are we going to demonstrate that we are really making an impact with our investments? And last but not least, it will be a year in which we will still need many good people. The search for the right people is a challenge. But we have a company with a great why, as it is called.”

What is the biggest challenge?

“We are going to test everything we have built and prepared. A lot of thinking has been done around the scheme, which is now becoming final. The question is: will those schemes stay close to the modular scheme, or will there be additional things that we have to design? The IT-systems we are creating are being tested, we are starting pilots with the first groups that are going to convert. Is that all working in the way we expect? In fact, we’re going to move into the new house, see if everything is in place and the pipes are running properly. I do find that challenging. But it also gives your energy a boost when, after thinking, designing and testing for so long, you get to see if everything works properly.”

Finally, in September 2022 you were declared the top business woman of the year. Does that help in this complex operation?

“The judges’ report talked about authenticity and boldness. And that is what you do need for such a big transformation. It is a confirmation for myself that this is being recognized. But more importantly, the people at APG recognize it too. This complex operation is going to require boldness. If our people dare to take steps, even though they don’t have 100 percent certainty, that is a very good thing.”