The €640m Dutch pension fund of British American Tobacco (BAT) has reduced its trustee board by 25%, in part to unburden the employer as the main supplier of board members.

On its website, the scheme said it had decreased the board’s size from eight trustees – with four representing the employer and two representing workers – to six.

In the new setup, both the number of trustees representing the sponsor and the number of worker representatives have been halved.

The scheme said it had added two independent trustees in order to increase the expertise on the board.

They are professional trustee Johan van Dulst, who has been appointed chairman, and Jaap Schepen, the former chair of the pension fund’s investment committee.

The BAT scheme is not the first pension fund that has scaled back its board.

Last year, Alliance, the €597m Dutch pension fund of food giant Nestlé, announced that it would reduce its board from 10 to eight members, citing “decreasing interest of potential candidates” for a board seat.

The €931m scheme of food producer Royal Cosun introduced a similar board reduction at the expense of both a sponsor and a worker representative.

Also last year, the €8.3bn pension fund of steelworks Hoogovens reduced its board by one-third to eight members, also bringing in a new and independent chair.

The pension fund of British American Tobacco made clear that it had decided to stick to its board model of an even split between employer and employee representatives, after assessing all available options.

However, it was not able to directly explain its choice when asked by IPE.

The BAT scheme has approximately 2,430 participants and pensioners with four affiliated companies, including Theodorus Niemeyer.

Its funding stood at 122.5% at September-end. Last year, it returned 6.2% on investments and granted its participants and pensioners a 0.18% rise through indexation.

It reported asset management and transaction costs of 0.32% and 0.02% respectively and attributed the rise of administration costs from €436 to €521 per participant largely to the transition of its pensions administration to Dion Pension Services last year.

The pension fund still carries out risk management, communication and asset management strategy in-house.

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