APG chief: ‘Pension funds will become dinosaurs without change’

If Dutch pension funds don’t conquer their fear of change and become more customer-friendly, they run the risk of becoming the “dinosaurs of the future”, according to Gerard van Olphen, CEO of the €470bn asset manager and pensions provider APG.

Speaking at the annual conference of IPE’s sister publication Pensioen Pro yesterday in Amsterdam, Van Olphen said his biggest worry was the “sector’s inability to change”.

In his opinion, pension funds must adopt the service level of, for example, Dutch national airline KLM or German online retailer Zalando.

“Participants as well as employers must be treated like genuine customers as people are used to nowadays,” he said, adding that “mandatory saving for an occupational pension also comes with an obligation for the sector”.

Van Olphen argued that the sector had a long way to go: it was still awarding communication prizes, for example, which he said was customary in other sectors five or 10 years ago.

Gerard van Olphen, APG

The CEO referred explicitly to helping participants find information and making choices. “Currently, we only provide very limited support,” he said.

“While participants are seeking assistance for making an informed choice, providers aren’t allowed to give any advice at the moment,” he added.

An additional problem, Van Olphen said, was that members “don’t know their pension fund and don’t trust the sector”.

APG was assessing the potential of big data and artificial intelligence for its processes, he explained, and was trying to deploy big data for predicting which questions web-surfing participants are to ask.

“By being ahead of the question, for example through a pop up answer, we could increase our service and lower our costs,” he said.

Van Olphen also made clear that APG had ceased an experiment aimed at picking up trends from social media traffic.

“We have concluded that the potential benefits don’t outweigh the costs,” he said.