Dutch transition: APG leans into data, IT and communication

APG has successfully shifted its smaller pension fund clients to the new defined contribution pension system and now begins the huge task of moving the giant ABP as well. The defined contribution system has many implications including shedding more than 1000 staff at APG and moving investments more into riskier assets.

Technology and the skills of its highly experienced internal team have been essential pillars to Dutch asset manager APG successfully transitioning its client funds bpfBOUW, SPW, and Pensioenfonds Schoonmaak to the Netherlands’ new pension system.

Now the heavy lifting continues in the next leg of the process – moving its biggest client, €543 billion ($632.2 billion) Stichting Pensioenfonds ABP, to the new system in time for the January 2027 deadline.

“It was the year in which technology, data and digitalisation came together, exactly when it needed to”, reflects CEO Annette Mosman during a presentation of APG’s 2025 annual report.

In a highly complex and time-consuming process, the country’s pension funds are moving away from a defined benefit system to defined contribution, tying pay-outs to contributions and market returns instead.

It means Europe’s largest pension funds will gradually move into riskier assets and out of strategies that have favoured long-term interest-rate hedging and matching assets closely to liabilities, in turn reducing demand for interest rate swaps with the potential to exert upward pressure on long-term interest rates.

Mosman said that APG has poured resources into improving the quality of its data, digitisation and technology, to support the transition in a strategy particularly focused on efficient administration to ensure APG can operate successfully within the new pension system.

“Without reliable, complete and standardised data, you can never operate at this scale,” she said.

New technology has included integrating software from Copenhagen-based fintech Festina Finance, with experience in defined contribution pension administration. But Mosman said success wasn’t just down to technology.

“It works because our people translate the system to the Dutch context, integrate it into our IT landscape and take the lead in its further development.”

She added that one of the biggest challenges in the transition process has been ensuring clear, tailored, communication on complex matters with plan participants.

“We are explicitly taking that lesson forward. Technical control alone is not sufficient. Clear, consistent and timely communication is at least as important.”

Staffing cuts

The reforms have sweeping implications for staffing at APG which will reduce its full-time headcount by between 1000 to 1200 employees by 2030 as it moves toward a leaner organisation with a lower cost base.

“Our clients expect quality at market‑conform costs. That requires us to critically assess how we are organised, also with a view to cost control,” said Mosman who stressed staffing changes would be implemented in a controlled and people‑centred way, with respect for colleagues and room for dialogue.

APG currently has around  3,700 internal employees from offices in Amsterdam, Heerlen, New York, Hong Kong, Singapore and a satellite office in Brussels.

higher interest rates dent returns

APG reported an absolute return on investment of ‑1.6 per cent (2024: 8.9 per cent) in a negative return the asset manager attributed to a rise in long‑term interest rates in the eurozone, putting pressure on fixed-income, and underperformance of active equity strategies.

It said non‑listed assets also lagged behind the returns on public equities. Through 2025, assets under management fell to €601 billion from €616 billion.

Noting its latest results had fallen below expectations, APG said it plans to “reassess a number of strategies” although it maintained that “active strategies can once again outperform benchmarks over time.”

“The underlying positions – the specific companies and securities in which these strategies invest – reacted unfavourably to uncertainty around tariffs and to the strong concentration of volatility and market performance within the IT sector. In addition, the shifting focus towards sustainable and responsible investing had a dampening effect on returns in the satellite portfolios.”

APG’s keen focus on ESG has also shaped its exposure to AI opportunities. Companies associated with AI “were rewarded by the market, regardless of their performance in the areas of environment, social factors or governance.”

Meanwhile, it noted that some of the smaller companies in its private equity allocation have yet to benefit from AI. In private equity, returns were negative in 2025 and lagged behind the (listed) benchmark over a five‑year period.

“The AI narrative still largely bypasses the smaller companies in the PE portfolio, although the benefits of AI may over time, lead to productivity improvements across companies more broadly.”

Approximately 6.5 per cent of assets are invested in the Netherlands (2024: 5.4 per cent) in line with ABP’s target to invest €10 billion in local impact investments by 2030.