Willem Steenhoven - board member ING CDC Pensioenfonds

“I usually blur my background in Teams,” Willem laughed when I asked him about the Tintin posters hanging on the wall behind him. “Youthful memories. Just like the James Bond poster, which is also on my wall. I know, Bond movies don’t have any depth, but they're great for action, pursuits, beautiful cars… and always a surprising end,” Willem adds about the latest Bond release, which is now in the cinemas.

Willem is 60, has a wide range of interests and likes looking at things from multiple angles. He reads four Dutch daily newspapers (NRC, FD, Telegraaf and AD) and closely follows news website ‘Follow the money’. “I read a lot. As much as I can! Born in 1961, I've been together with my wife Karin for 40 years and have been working at ING for 35 years. So I'm loyal and dedicated. Not because I need to be that way, but simply because it feels better.”

Finance and risk
Just like Ad Kas, who we also interviewed for this edition, Willem was a Chief Risk Officer. “First I was the CRO of a real estate company and after that I held the same position at ING Nederland until 2015. Then I was appointed Director of the WestlandUtrecht Bank, where I held co-responsibility for the bank’s decision to outsource everything. What was left was a small service organisation, which is exactly what a pension fund does as well. It works with a small board bureau that monitors all activities. I can put my experience to good use in the Finance & Risk Committee, which I am a member of as part of the pension fund board.”

Asset and liability management
“I am also on the A&L Management Committee. You’ve got the pension fund's targets and ambition on the one hand, and what participants want on the other. We develop the pension fund's policies with these things in mind, after which we create an investment portfolio. It's a complicated process because you need to make long-term forecasts, partly because we are a young pension fund. It's not much use making all sorts of decisions based on current-day situations. You need to review your policy all the time. After all, how are we going to ensure that the pension contributions, which are not enough to enable life-long pension benefits, will yield the best possible returns? That's what we do in the Committee.”

Open your laptop
"I became a member of the pension fund's accountability board when I was still working at ING. When I left the company in 2019, they asked if I wanted to join the board. I was happy to say yes. By that time, I had become very interested in pensions and my role on the accountability board turned out to be a good place to learn more. That was when I really started to study the topic of pensions. Rather late, actually. I urge everyone to delve into pensions much sooner. I also see that as a task for the pension fund. We must get people to take action. They should open their laptop to find out what their financial position will be when they retire – and what they can do about it. We haven't been able to increase pensions to keep up with inflation for a long time now, and we need to cut back accrual rates. That means participants will lose their spending power. And that's starting to hurt.”

How our pension plan works
“We can’t repair that with returns, because our pension fund simply doesn't work that way. As a participant, all you know for sure is that the contributions paid into the pension fund, part of which you pay yourself, are fixed. Using these contributions, the pension fund tries to realise the maximum accrual rate allowable under Dutch tax law. When we started in 2014, that was agreed by the social partners: the employer and the employees. As the administrator, we merely execute the pension plan, which means we consider the contributions on the one hand and the targeted accrual rate on the other. When we started, the agreed contributions were sufficient to ensure a good accrual rate, but since then interest rates have dropped, so a 1.784% accrual rate is no longer feasible. The only thing we can do is lower the accrual rate. So that's what we did in 2020 and this year, and will do again next year.”

Our challenge
“Going forward, it's really going to be a challenge for us to ensure that participants stay well informed and that they take action. We have what's called a CDC pension plan. Under this type of pension plan, the annual contributions are fixed while the benefits are not. Participants pay a share of the contributions (7.5%). Of course, everyone will also receive their Dutch state pension (AOW), but for many people that won’t be enough to continue their current lifestyle. So it's important to find out now whether you’ll have enough to make ends meet when you retire.”

Return is needed
“It goes without saying that investments are an important topic. The pension fund opts for investments that will yield enough returns to be able to pay out your pension benefits in the future. European sovereign bonds, for instance. We also invest so we can increase your pension to keep up with inflation. To do that, we need returns from investments in equity, real estate and corporate bonds. As the pension fund grows, we can spread more. That reduces the risks and gives us a wider range of investment options to achieve our targets. Of course, we focus on our targets and our ambition of realising a pension that will retain its value. We also have a strong focus on social awareness. That's the feedback we’ve received from surveys among our participants. We have exclusion lists for certain countries and types of businesses, for instance. We take part in shareholder meetings so we can vote on important issues. And when it comes to real estate, we only invest in certain categories. Of course, all of us share responsibility for keeping our planet habitable.”

Take control
“As a final word to all readers, I’d like to say: take control! Find out what your situation is in terms of pension. We can help you, via our website, the Pension Planner and the Pension Desk. And keep an eye on our webinars. Particularly if you are on the verge of a major change in your life, like a new job, the end of your relationship or the start of your retirement. In such situations, you should think ‘How will this affect my pension?’”