Case Study—PFZW1



PFZW is the compulsory industry pension fund for employees in the Dutch Health Care Industry. It is the second largest pension fund in the Netherlands, with 2.4 million participants, targeting indexation of pension payments with wage inflation. Assets under management are $197.2 billion at the end of 2017. Since 2008, there has been a split between PFZW (the pension fund) and PGGM (its Pension Delivery Organization), which advises on and implements the investments, amongst other things. The board of PFZW includes representatives of employers and employees, with an independent chair.

The challenge

After the financial crisis of 2008–2009, PFZW faced a number of questions that essentially said: the world has changed in a significant way, does our investment thinking reflect these changes? For example, the paradigm of “efficient markets” did not help to prevent large losses. The license to operate for Defined Benefit (DB) pension funds was no longer self-evident. Trust in pension funds by society was at a very low ebb. And PFZW felt the need to integrate sustainability in a more profound way. Last, but not least, after becoming separate entities, PFZW began developing its own identity at a certain distance from its service provider PGGM. Being the asset owner, PFZW felt it should formulate and own the principles for investing. PFZW felt that having a strong set ...

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