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SNPF, the €1.2bn occupational pension fund for notaries in the Netherlands, is to rearrange its entire investment portfolio with the view to improving control of the interest risk on its liabilities, as well as to save costs. The scheme recently changed the management style of its matching portfolio from active to passive, with its investments following the liabilities curve as closely as possible, according to Eric Uijen, the scheme’s director. Uijen told IPE the €550m ‘liabilities portfolio’ chiefly consisted of high-grade government bonds from Germany, the Netherlands, France, Finland and Austria.With added interest swaps, the portfolio covers approximately 80% of the scheme’s interest risk, he said. The SNPF also converted four fixed income mandates into one, managed by Syntrus Achmea Asset Management.The pension fund said only limited mandates for credit remained with Aegon and Pimco, and that it no longer employed the services of Lombard Odier.According to Uijen, the changes stand to save the pension fund €700,000 a year in asset management costs, while the “considerably lower” number of deals will cut costs even further.He estimated that asset management costs, without transaction costs, would drop from 0.42% in 2012 to approximately 0.20% in 2014. Uijen said the scheme’s return portfolio would be screened for possible efficiency improvements for cost cutting – by converting to passive management, for example. “At the moment, we need to answer the question of whether and to what extent we want to allow asset managers to deviate from the assigned benchmark,” he said. The SNPF’s return portfolio consists chiefly of investment-grade credit and global equity.Uijen said the pension fund intended to divest its 5% private equity holdings gradually, as the SNPF considers itself too small to have such illiquid assets in its portfolio.He added that the asset class was also “difficult to comprehend”. However, he said the SNPF was in “no hurry”, as its current investments were in the “right position on the J curve”.With the view to cutting costs further, the scheme transferred its pensions administration – managed in-house to date – to provider TKP Pension last January.The pension fund had to apply rights cuts in 2011 and 2013 of almost 2% and 5.8%, respectively, in order to adhere to its recovery plan.At year-end, its coverage ratio stood at 106.5%, 2.1 percentage points above the legally required minimum.