Arie van Luijk, who has been a true stalwart of the Fund, will retire in July. His successor, Hans Veltman, worked at TNO and transferred from the Board to the administrative office in June. An excellent reason to talk to both of them. The result of this double interview (which was held before Hans started) is a fascinating look at the history of the TNO Pension Fund and a personal story about wishes and ambitions.

The story begins at TNO in the 1980s. Everything relating to the pension was placed with various TNO staff bodies. For example, there was a pension office for the pension administration and management support fell under personnel affairs. Another staff department was responsible for financial accounting and pension payments. Arie worked as an in-house lawyer in ‘Social Affairs and Personnel Services’. He later headed the Labour Affairs department and became increasingly involved in pension matters.

Arie’s first task was to bring all pension activities together in one pension office under his leadership. Not long afterwards, this pension office gained legal and physical independence and fell directly under Stichting Pensioenfonds TNO (TNO Pension Fund). As the first Board member 25 years ago, he was the foundation of what is now the administrative office in Rijswijk. As deputy director all those years, Arie has been closely involved in all pension developments at TNO Pension Fund: from policy to implementation, such as the transition from the final salary scheme to the average earnings scheme and implementing many legislative and supervisory requirements.

‘Of course, you’re there for a reason,’ responds Arie modestly. ‘A balanced weighing of interests is essential in my position. After all, a group scheme is essentially sharing risks. The income risk is shared in several situations, including for work disability, surviving dependants, and a long life expectancy. These risks are shared by everyone: from participants who have just joined the company to colleagues retired for a long time. To develop a balanced policy, you must be able to put that weighing of interests on paper and make it clear and understandable to others with the correct figures.’

From 2003 to 2015, Hans served on the TNO Works Council, where employment conditions were tabled for discussion. ‘TNO does not have trade unions to deal with pressing issues, so they are brought before the Works Council. It’s great when something changes, but you have to explain it properly to your colleagues. You have an enormous responsibility in the Works Council. This institution really helped me develop and my interest in pensions was sparked during that period.’ Arie confirms from his experience that pension is a very important employment condition. ‘It is a substantial asset and an essential part of many families’ income. Besides income at retirement, there is also partner’s pension if the participant dies, the possible supplement in a work disability pension under the WIA (Work and Income [Capacity for Work] Act), and permanent pension accrual if work disability occurs.’

‘Partly as a result of the financial crises since 2000 and resultant changes to laws and directives, pensions have become more complex,’ says Arie. ‘Pensions have gone from being more or less self-evident to a subject that is garnering increasingly more attention. This has been prompted to some extent by financial and social developments, such as the sharp fall in interest rates and increase in life expectancy.’

‘For example, the premium can no longer be used to make adjustments as it has been in the past. Pension fund assets have grown so much that a premium increase has only a limited effect. Pension indexation must also be financed from the returns on investments. Having an investment policy well attuned to the Fund’s commitments is therefore crucial. You must now demonstrate even more concretely that you are in control and understand the risks.’

Hans adds, ‘Real risks are also not always reflected in the figures. Ideas from cognitive psychology are being recognized in the financial world for the first time.’ ‘Pension communication is a major challenge,’ agrees Arie. ‘Some aspects are difficult to explain. That doesn’t make things any easier. It sometimes seems as though the capital is vanishing into thin air.’ Hans also explains, ‘The Dutch pension system is a major asset. We should be and remain a future-proof pension fund.’

‘The strength of our pension scheme lies in the fact we can take the wishes of our employers, participants, and pension beneficiaries into account,’ says Arie. ‘Everyone is close at hand and involved.’ Hans adds, ‘We’re moreover in a situation where there is not much meat on the bones. We don’t have the luxury of making an enormous deposit to face off financial difficulties. We have no safety net.’ ‘As a corporate pension fund of TNO and the other affiliated employers, we can’t take major risks,’ Arie continues. ‘As our risk profile is very prudent and less extreme than you would usually see at larger pension funds, we do not deal with major deviations. Precisely because we’re so aware that we can achieve the maximum for each other with this precondition.’

When we ask Arie about his wish for the future, he refers to the book published for the pension fund’s 50th anniversary. ‘It describes how beautiful things have been achieved. And it expresses the hope this will continue for the next 50 years. Meanwhile, we have passed the 75-year milestone. I hope that the value of having one’s own pension fund will continue to be recognized in these turbulent times.’ ‘We must therefore remain attractive for TNO and its employees,’ adds Hans. ‘This brings us back to the heart of the matter: the strength of our pension scheme is the bonding and involvement with TNO and the other employers affiliated with the Fund, the participants, and our pension beneficiaries.’

And what would Arie like for his successor? ‘This year or soon afterwards, the government will probably provide clarity on the future of the pension system. Studies will be needed to map out the consequences, risks, and options. These must be followed up by various actions, including the development of policy proposals for the Board. From a technical perspective, this is quite an enviable challenge. I wish my successor much wisdom, patience, and satisfaction.’ And tips? ‘Hans doesn’t need any tips from me. He is well-versed in pension matters and from his time on the Works Council at TNO and later as a Board member at the pension fund, he has looked in depth at the various pension aspects. His successors on the Board and the Works Council may need tips, advice, or support, but Hans can best give that himself.’

‘You’re basically the pension fund, Arie; you always know everything. You’re its silent force.’ Nevertheless, Arie will stop working on 1 July and enjoy his freedom; he will then be 65. ‘No more meetings. And I think it’s great I won’t have to schedule my work so long in advance. We’d like to go to Brazil, for example. My wife comes from there. She has lived in the Netherlands for 40 years and we can soon spend time there more often and for longer periods. I will also have more time to go out with my grandchildren, aged two and six. And who knows, I might take up piano again.’