Preparing for the new pension contract: a plea for cooperation between chain partners
With the impending introduction of the new pension contract, pension funds are compelled to take a good look at the way in which the executing parties cooperate. Questions that may arise include: who will take charge and how do we come to a joint standard. Kees-Jan van Vliet, partner at Boer & Croon, sees new opportunities in addition to challenges.
The new pension contract makes the relationship between pension administrators and asset managers closer. In the past decade, many pension funds have increasingly divided their services and outsourced them to various executing parties. This not only improved efficiency, but also quality, as the best player was selected for each specialization. With the new pension contract, the downside of this solution is now becoming apparent: parties are working from their own standards. After the introduction of the new pension contract, parties will have to cooperate more and come to more common standards. In and of itself, no party is opposed to this, but it is difficult for parties to come to a joint standard.
To keep this in check, pension funds should clearly assign the leadership to one party, or facilitate the development of the desired standard. It is important that a party is chosen who develops a model that works well for everyone, instead of imposing their own standard on others. This will be a challenge, but ultimately it offers opportunities for the pension sector, as this could lead to cost savings for the whole and pension funds may also get a better overall chain overview.
Regardless of who takes on this leadership role, one outcome is certain. According to game theory, for each party individually, the best solution is to reason from their own standards. But the best outcome for all pension funds and pension executors as a collective arises if everyone gives something up and a standard is adopted that is workable for everyone. This means that everyone in the market will have to jump over their own shadow a little bit.
call to action
It is now important not to adopt a waiting attitude, but to sit down quickly and start the conversation. Everyone must be willing to let go of their own methodology and look at what solution is best for everyone. Boer & Croon can help facilitate this.