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Highlights 2019

Edwin Velzel resumed his work as Chief Executive Officer of PGGM N.V. (PGGM) and Chairman of the Supervisory Board of Vermogensbeheer B.V. on 1 April 2019, after an absence for health reasons since 19 October 2018. During the period to 1 April, the absence regulations in accordance with the Articles of Association were in effect.

Paul Boomkamp stepped down as Chief Financial & Risk Officer of PGGM and as a member of the Supervisory Board of Vermogensbeheer B.V. on 1 September 2019 and left PGGM.

Willem Jan Brinkman was appointed Chief Financial Risk Officer and a member of the Executive Board of PGGM on 29 November 2019. On the basis of this position, he was appointed as a member of the Vermogensbeheer B.V. Supervisory Board on 27 January 2020.

In 2019 intensive and constructive talks were held with the AFM. Matters discussed with the AFM included the way in which asset segregation is applied within PGGM Treasury B.V. (Treasury). Different scenarios were also discussed for the future design of Treasury. Vermogensbeheer has decided that the Treasury will be organised at the client and fund level.

Vermogensbeheer received a warning letter from the AFM with regard to the implementation of MiFID II. Vermogensbeheer has started a process for follow-up of the findings.

The Supervisory Board discussed the effects of these developments on the business operations and the strategic choices with the Management Board.

During 2019, the Supervisory Board received updates on the latest position concerning Brexit and the preparations for this at Vermogensbeheer. An extra Supervisory Board meeting was scheduled for that purpose. It was noted at that meeting that Vermogensbeheer has prepared as well as possible for a no-deal Brexit.

The Supervisory Board devoted close attention to the latest position concerning the Vermogensbeheer Strategy and the re-contracting with PFZW. The 2025 investment policy of PFZW is also in development. The consequences of this will also be reflected in the Vermogensbeheer Strategy. In that regard, the Supervisory Board also discussed the efforts concerning best-in-class Vermogensbeheer and the Future-Proof Vermogensbeheer programme with the Management Board.

In November 2019, the Vermogensbeheer Business Plan (BP), which describes how Vermogensbeheer can develop to become an excellent administrator on the basis of the existing mandate and investment instructions, was discussed with the Management Board. The shared and overall beliefs will also be discussed further with PFZW in that regard, and the Supervisory Board will remain involved in this.

The Supervisory Board also conducted talks on other developments that could influence the service provision to clients and the business operations, such as the Euribor reform and the system change in the Dutch pensions landscape.

Vermogensbeheer has been conducting talks with APG for some time on a partnership in the Sustainable Development Investment initiative. The Supervisory Board was informed about this during the year and expressed its support for this process. The Supervisory Board was also kept informed of developments relating to the participation in Sustainalytics.

The Supervisory Board considered the broader governance debate at PGGM.

The matters discussed included the relationship between the PGGM Supervisory Board PGGM and the Vermogensbeheer Supervisory Board. The possibilities for simplifying the governance of the PGGM group and its subsidiaries were also considered.

The Supervisory Board advised on the impact of the above developments on the organisation, the role and relationships with other entities within the PGGM group and the relationship and communications with the clients of Vermogensbeheer.

Remuneration policy

The Supervisory Board evaluated the remuneration policy and determined that it is managed and complies with laws and regulations. With the current mix of a basically moderate remuneration policy (at the median level) with the specific deployment of additional fixed and variable instruments such as the Personal Market Bonus and Deferred Variable Income, Vermogensbeheer has succeeded in finding a good balance. The remuneration policy of PGGM (including Vermogensbeheer) is currently being reviewed.

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Subjects of regular meetings in 2019

The business update and reports on clients, business operations and the supervisory authority are fixed agenda items at every regular meeting. The financial results and the main risks associated with the business operations are reviewed here, on the basis of the different risk management and performance reports and the quarterly responsible investment report.

The Management Board presented the Vermogensbeheer business update on the basis of the performance of the investments, finance, the risk picture and employee satisfaction, supplemented by varying topics such as the annual plan and progress with this, new funds and the findings of the Internal Audit.

At the request of the Supervisory Board, performance was given a more prominent position in the business update. Together with the Management Board, the Supervisory Board considered the coverage, which is under pressure due to falling interest rates despite the good yields.

The Supervisory Board discussed the 2020 SLA negotiations with PFZW with the Management Board, as well as the further specification of the IT spend and long-term support for the staffing per asset class.

With regard to the risk policy, the Supervisory Board discussed matters including the ICAAP and the measures to adjust the risk picture for some risks to the risk propensity again.

In addition to the run, the Supervisory Board also discussed progress with the extensive change portfolio. For example, efront went live, creating a more robust and scalable system landscape.

In December 2018, the annual employee assessment took place and the Supervisory Board stated that it attached great importance to the outcomes and the follow-up of these. Attention was devoted to this at all regular meetings. Behaviour and corporate culture are regarded as important elements for the realisation of the strategic objectives.

The Supervisory Board also receives regular information on developments in the Vermogensbeheer market. The Supervisory Board receives the Vermogensbeheer Highlights every quarter, with developments in the financial markets and at PGGM Vermogensbeheer. In this context, some time is devoted to particular investments that could have a positive or negative effect on the business operations or reputation.

The laws and regulations and their potential impact on the business operations of Vermogensbeheer are also discussed at every meeting. The Supervisory Board discussed matters in this regard including the proposal of the Management Board to develop an internal training programme on the professional skills requirements arising from MiFID II. A training plan was drawn up in relation to the permanent education of the supervisory directors. The Supervisory Board also discussed the proposal for adjustment of the insider trading regulations with the Management Board.

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