"We count our blessings"

What motivates the directors of the pension funds that APG works for? And how are they experiencing the current times in which they are bombarded with all kinds of information? After all, many funds are switching to (or have already switched to) the new pension regulations. In addition, their administrator is in the middle of a transition. In this series of interviews, we talk to them. This time: Robert Meulenbroek of the Pension Fund for Architectural Firms (PFAB). 

Doorn, a leafy avenue. Meulenbroek cheerfully opens the door. And he has every reason to be cheerful. PFAB has seemingly got things well organized for the transition to the new pension rules on January 1, 2027. Preparations started back in 2022, the new scheme is finalized and has been submitted to the accountability body for advice. The partial assessment of the risk attitude will also soon be sent to the Dutch Central Bank (DNB). The same process for data quality and the pension scheme will follow shortly thereafter.

Not a cloud in the sky, you might say
“The accountability body has an important voice. In the coming weeks, they will advise us on the transition to the new pension scheme. If they give a positive recommendation, it will be an essential step. But if they see room for improvement, we will have to go back to the drawing board. Then we will fall behind and possibly miss certain deadlines.”

What are the potential sticking points for the accountability body?
“The social partners have not explicitly agreed to a purchasing power objective in the scheme. They have, however, asked the pension fund to formulate an investment policy that strives for the highest possible objective. The accountability body attaches great importance to the purchasing power of pensions, including under the Pension of the Future Act (Wtp). Calculations of our investment policy show that we can keep up with about 80 percent of price inflation on average. They must also assess whether the total of agreements is sufficiently balanced for all ages and participant groups. That is quite complicated and challenging.”

Two funds that APG works for have already switched to the new pension regulations. What can you learn from these funds?
“A lot. The way in which PWRI has organized its asset management, for example, is very similar to ours. They have the same fiduciary manager. How do you ensure that the link between pension administration and asset management works properly? We are looking at this with great interest.”

PFAB is also very different from many other funds. For example, you have almost 50,000 participants, many of whom are dormant. How did this happen?
“Our participants are not only architects. They also include administrative staff and technical and financial support staff. The 2008 crisis took a heavy toll on our sector, and some of the support staff left the industry and found work elsewhere. This explains why half of our participants are dormant. Approximately 15,000 participants are retired and we have 10,000 active members.”

This would seem to throw the participant base somewhat out of balance. Why doesn't PFAB join another fund?
With a smile: “Architects are stubborn people.” And seriously: “They attach great value to having their own mandatory industry-wide pension fund. They feel connected. It is not without reason that a good relationship with the industry is important to us. An architect also sits on the board on behalf of the employers. And the members of the accountability body all come from the sector. Plus, we are a medium-sized fund with 5 billion in invested capital. That is more than enough for independence.”

But with 10,000 active participants, the pool is getting pretty small. To what extent do you, as a mandatory industry-wide pension fund, pass the representativeness test?
“I can’t deny that there is pressure to make the fund mandatory. We still meet the representativeness test, which assesses whether an important majority within the sector supports the mandatory nature of our fund. However, due to the shifting emphasis in the market – in addition to a number of large architectural firms, there are many small employers active in our sector, which means that the Dutch Association of Architectural Firms is dealing with declining membership numbers – the representativeness test may turn out differently in two years' time. That coincides with the moment when we switch to the new pension rules. If we fail this test, the mandatory status will be canceled and we will have two years to adapt. We have already mapped out the scenarios for this. Joining another fund will then be one of the options. But we can also continue as a non-mandatory fund or as a closed fund.”

In what way are you of added value to participants as a fund?
“Participants are satisfied with our services and have provided input for the solidarity scheme through national conductor sessions that we organized, which we then shaped with social partners and APG. We would also like to keep the large number of dormant participants who leave their contributions with us for the new scheme. This way, we compensate dormant participants through the legal scope of 5 percent for measures to improve the balance.”

Even after the first three funds switched to the new rules, there are still a lot of dynamics surrounding the arrival of the renewed pension system, including proposals for collective right of consent in the transition. As a director, how do you view this?
“I take a pragmatic view of this, but that does not mean that I agree with it. For example, it will be an enormous challenge for us to properly inform all participants, dormant members and pensioners about the significance of a switch in a referendum. After all, pension awareness is low. In addition, we are dealing with a large number of dormant members. How do you reach them? This is much more difficult for an industry-wide pension fund than for PPF APG, for example, which has a membership base that is completely at home in the pension world and easier to reach. If the mandatory referendum does come about, I would argue for a 'yes, unless' instead of the current proposed ‘no, unless’.”

The critical mass is also mobilizing on a legal level. In addition, administrators are being personally addressed. How concerned are you about that?
“If you see how we make decisions, then I am not worried. Everything is coordinated and recorded with the social partners, with the Dutch Central Bank (DNB), and the Netherlands Authority for the Financial Markets (AFM) also looks in on what we do. If you gather all the decision-making documents, I believe you have a very good legal defense. That does not alter the fact that a trial is very unpleasant and distracting for all involved. In any case, it means that we must have our checks and balances in order.”

In any case, your administrator is APG, with an adjusted strategy for 2030. How do you feel about that?
“Some time ago, we made an agreement with APG that we would inform each other annually about the strategic outlooks. We don’t like surprises. The last meeting was on December 18, the day on which ABP presented its new vision on outsourcing. That led to some discussions. You see, two years ago, APG’s strategy was to combine pension management and asset management. But our investment policy is carried out by a fiduciary manager outside APG. We then entered into discussions about what the future might look like, up to 2030. This outcome fits in well with our strategy; APG takes care of our pension administration and communication, and our investments are carried out by others. That is how it will stay.”

What do you think of the two-tier model for pension administration?
“First of all, we are very satisfied with APG. They are familiar with our issues, contribute good ideas and their knowledge and expertise are very high. Moreover, we understand very well that ABP, and to a lesser extent bpfBOUW, have a greater influence on APG's strategy than we do. That is not a problem at all, the fact that APG is the administrator for such large funds is also to our advantage. So we count our blessings. The only thing we are critical of is the costs per participant. How do they develop in the two-tier model? We are a fund with a relatively small number of participants compared to ABP, for example, so the costs continue to add up.”

Name: Robert Meulenbroek
Position: PFAB vice chair
Resides in: Doorn
Age: 56
Vision: “I think it is important for everyone to start building a sustainable income (both in terms of the amount and in social value) for later; for themselves or for their partner after death. To that end, the choices we make today are already important. For everyone who works or has worked within the sector and for their dependents.”