One of the Netherlands’ biggest pension funds has stopped paying performance fees to its in-house fund manager in a move that illustrates how investment costs are coming under severe pressure in Europe’s second-biggest pensions market.

Pensioenfonds Zorg en Welzijn, which looks after €178 billion in retirement savings for more than two million Dutch healthcare workers, will no longer offer the reward payment to PGGM Investments, which runs its money and administers the scheme's payments.