BeFrank’s investment policy

At BeFrank, we offer employees a pension scheme. This is a collective pension based on defined contributions. This page explains the general principles behind our investment policy.

BeFrank PPI administers defined contribution pension schemes. This means that each employee accrues pension capital by means of investments. On the employee’s retirement date, the value of those investments is converted into a lifelong pension benefit. 

The general principles behind our policy

The result of these investments is extremely important for a good pension. BeFrank is responsible for how our experts (and employees) invest capital. We have therefore adopted an investment policy with the following general principles:

  • The defined contribution plus the investment returns determines the amount of pension
    Employees accrue pension from the contributions they pay together with their employer the investment returns on the accrued capital.

    However, investing also involves risks. At BeFrank, we weigh up those investment risks as best we can. After all, we expect this to result in a higher pension in the long term. By properly weighing up the investment risks, we keep the pension contributions manageable and employees can look forward to a good pension.

    Taking a considered investment risk is expected to lead to a higher pension over the long term. The pension consists of contributions and the returns realised on the accrued capital. Participants therefore benefit from taking considered investment risks to keep the pension contribution manageable with the prospect of a good pension.
  • Balance between return and investment risk
    At BeFrank, we invest according to the lifecycle method. This means that we factor in an employee’s age when we invest. As an employee approaches their retirement age, we reduce the investment risk. This provides employees with more certainty about the amount of their pensions. 

    We always aim to create the best balance between return and risk. In the accrual phase, we mainly focus on return. In the risk reduction phase, we gradually reduce the investment risk and interest-rate risk. 

    This prevents sudden market movements from having a disproportionate effect on the final pension. However, it’s good to remember that there is still a risk of poor returns over the long term.
  • Appropriate risk profile and freedom of choice
    We are aware that some people prefer to take more investment risk than others. For this reason, BeFrank offers different lifecycles. Employers can select a standard lifecycle within the pension scheme.

    However, employees can also select a risk profile that matches their personal situation. In order to find out their risk profile, they need to complete a questionnaire called the Profile Selector. Based on their answers, we then recommend a risk profile.
  • Active, passive and sustainable investing
    At BeFrank, customers can choose a passive, active or sustainable form of investment.

1. Passive investing

Our passive lifecycle is for customers who prefer simplicity or are less inclined towards active investing . These customers do not want to be surprised by returns that deviate from the index return. They prefer low costs and the highest level of sustainability.

We use objective criteria to select the best index funds in the institutional market. We only use an active allocation in asset categories if this adds value.

2. Active investing

Our lifecycle that involves active management is for customers who believe in active investing. We draw on the knowledge and experience of NN Investment Partners. Customers who opt for active investing need to accept that returns can deviate from the index. 

Our specialists also use tactical asset allocation. This is based on the valuation of asset categories or market sentiment. The funds are becoming more sustainable, which aligns with our active management objective. 

3. Sustainable investing

It’s in the name: our sustainable lifecycle has a very strong focus on sustainability. This involves much more targeted investments in sustainable companies than in active and passive investing. We also have a strict exclusion policy.

Asset categories that do not qualify as highly sustainable under our selection criteria are not included. Good to know: the investment costs of this lifecycle are higher. In the short term, the returns may differ significantly from the standard benchmark. This is a good form of investment for customers who accept that.

  • We invest as sustainably as possible
    Socially responsible investing is a key aspect of our investment policy. Making conscious choices when it comes to selecting investments can contribute to a better, sustainable future. Sustainable investing can also add value by mitigating risks. In all forms of investment, our asset managers practise voting and engagement.
  • Sustainable Finance Disclosure Regulation
    BeFrank is covered by the Sustainable Finance Disclosure Regulation (SFDR) of the European Union. This scheme is intended to increase transparency concerning how financial market parties integrate ESG risks and opportunities into their investment decisions. More information is available on our page about the Sustainable Finance Disclosure Regulation
  • Cost control
    Cost control is important to us. Besides return, costs are a determining factor for the amount of the final pension to be attained and thus should be kept as low as possible. 

    In practice, cost control is an important means of determining the return on the investments. 

    Where possible, we avoid tax leakage by choosing a selection that avoids the withholding of dividend tax and we reclaim this tax where possible. This produces benefits employees every single year.
  • Minimal impact on returns and costs
    BeFrank strives to follow the best possible SRI policy appropriate to each form of investment. However, for the passive style, the criterion is that the effect on return and costs must be extremely limited. 

    In the active form of investment, sustainable investing may lead to a greater deviations in return. In the sustainable form of investment, major deviations from the benchmark are accepted, along with a simplified strategic mix and higher investment costs.
  • Diversification, simplicity and liquidity
    At BeFrank, we strive to keep our investments straightforward and avoid unnecessary complexity. Our investments, instruments and investment strategies need to be understandable and explainable with a predictable outcome.

    Diversification is important to us but it is not unlimited. It can be a means of reducing the risk associated with an investment portfolio. We strive to create the perfect balance between effectiveness and simplicity in the portfolio. 

    An investment category will only be included if it is useful and appropriate to the character of the lifecycle. We avoid concentration risks in terms of sectors, regions and countries. The investments must be liquid. After all, the investment capital has to be at the disposal of the employees at all times.
  • Governance: structure of the investment process
    Governance concerns the structure of the investment process. BeFrank has structured its investment process so that the Board is engaged and in full control at all times, supported by risk managers and other experts. 

    BeFrank has ultimate responsibility for its investment policy and has established a framework of objectives and preconditions in full independence.