The supervisory board of Dutch building sector scheme Bpf Bouw has questioned its provider APG’s ability to innovate, criticising both the firm’s asset management and pension administration practices.

In the penison scheme’s annual report, the €77bn pension fund’s supervisory board wrote that “the fund has signalled several times that the innovation ability at APG Asset Management seems limited.” It adds: “A similar picture emerged from an external analysis commissioned by APG’s board.” (IPE has not seen the external analysis). 

According to Bpf Bouw director David van As, the report was about APG’s pension administration business, but he added that APG could innovate faster in asset management, too.

“This is especially the case with sustainable investing, when it comes to things like the energy transition and climate risk,” he said. “APG is doing a lot on these topics but it could accelerate. Another example is the allocation to alternative credits which took quite long to establish.”

But, Van As added: “I want to stress that APG is not hopelessly lagging behind either.”

Pension transition

According to Van As, the upcoming switch from defined benefit (DB) to defined contribution (DC) pensions makes it also essential for a pension provider to be agile and innovative on the admin side. 

“All in all, we recognise a lot of things are changing at the same time at APG,” he said. “The switch from DB to DC involves a totally different way of thinking: the conversion of accruals to personal pension capital. It’s paramount to get all the data right during the transition process, in which innovation is also an important theme.”

APG is currently in exclusive negotiations with Danish IT firm Festina Finance to provide a new system for DC pension administration