Interview with chairman Martin ten Brink and executive board member Martin van ‘t Zet

double interview

Nice returns, high interest rates and a falling inflation rate. The SNPS pension fund's anniversary year turned out to be much better financially than 2022, explain chairman Martin ten Brink and executive board member Martin van 't Zet. At the last minute, invested assets just reached 500 million euros.

“The year 2023 was very different from 2022”, Martin ten Brink notes. ‘Not a little bit different, but a world of difference. While in 2022 we still had to deal with sky-high inflation and an interest rate development that caused almost all investment categories to record negative results, in 2023 we saw quite the opposite. Although interest rates continued to rise in the first 3 quarters, inflation declined sharply and almost all investment categories achieved positive returns. At the end of 2023, invested assets even reached the €500 million mark for the first time in our 10-year history. What the markets again highlighted for us is that long-term investments should remain our focus. Volatility is always there. But as a pension fund, you must take a far more extended view than the short term.”

High interest rates
Van ‘t Zet: “It wasn't just the good investment returns that marked 2023, the interest rate development also made it to be a remarkable year. Only in the last 2 months of last year did we see interest rates fall. For pension funds running defined contribution schemes, such as SNPS, higher interest rates mean that more pension can be purchased at retirement date with the accumulated pension capital. In addition, we are again expected to be able to slightly increase pensions in payment.”

Martin van ‘t Zet

New pension law
For many pension funds, 2023 was marked by a major change: the parliamentary approval of the Future Pensions Act (Wtp). It came into force on 1 July 2023 and must be implemented by 1 January 2028. This puts the pension world on the threshold of a huge financial operation. Altogether 1,500 billion euros of pension funds nationwide have to be divided among ‘personal pots’. “For many funds, this means they must get to work”, says Ten Brink. “But this is much less the case for SNPS. We already work largely according to the principles of the new pension law, where each participant accrues pension capital individually and can opt for a Collective Variable Pension (CVP) from the retirement date onwards. It is therefore expected that entering the new system will be a lot less challenging for us.” Van ‘t Zet: “Indeed, as a pension fund with variable benefits, we are one of the forerunners in the Netherlands. Over the past period we have already gained the necessary experience with guiding participants through the process of making pension decisions in order for them to make an fitting choice. The duty to provide guidance for the decision-making process has been introduced by the new law, but we have been doing just that for quite some time already."

Martin ten Brink

Well-considered choices
The task for SNPS, according to the gents, is above all to keep participants well informed about the consequences of their decisions. Van ‘t Zet: “We try to activate our participants to make choices within their pension scheme. And we are quite successful in this. In 2023, 84% of participants have made a well-considered choice between a fixed equal pension or an expected higher variable pension (with a variable pension the amount of your pension benefit can fluctuate). Within the pension industry, that is a tremendously high percentage.”

Van ‘t Zet: “Our challenge is to maintain that high percentage of well-considered choices made by participants. We realise this is quite difficult because we are already at such a high percentage now. But we will continue to encourage participants to actively think about their pensions and guide them in their decision-making. To implement this further, we have engaged a party in 2023 that, on behalf of SNPS, supports participants (if required) in making pension choices.”