The Dutch company pension schemes of Yara, a fertiliser producer, and Calpam, a trading company in fossil fuels, have both concluded a buyout deal with an insurer and will liquidate by next year. Another company scheme, Pensura, has seen a planned buyout being blocked by regulator De Nederlandsche Bank (DNB).
Yara, which has about 2,000 participants and €650m in assets, announced earlier this year it was intending to move accruals to an insurer. This is, however, no guarantee for a buyout to materialise.
Last month, the fund of Dutch custodian bank Kasbank (now part of Caceis) decided to continue independently after receiving “disappointing” offers from three insurers: ASR, Nationale Nederlanden and Zwitserleven.
Kasbank had a funding ratio of 126%. The higher a fund’s buffer, the higher the annual indexation it can demand upon concluding a buyout.
Few funds have opted for a buyout in the last two years, with pooled pension funds or remaining independent proving more attractive for most.
According to the board of the Yara scheme, which has a funding ratio of over 140%, Zwitserleven did indeed make an agreeable offer.
“Their offer was the best solution for all employees, former employees and pensioners,” said president Peter Vlaeminck, who added that the fund did not simply pick the offer that provided the best indexation.
“We also took issues such as communication, service and sustainability into consideration,” he said.
Vlaeminck added that Zwitserleven will index pensions by about 95% of inflation each year, on top of a one-off pension increase of 3-5% when the fund is liquidated. The final percentages will be determined shortly, according to Vlaeminck.
By opting for a buyout, the fund’s board is following through on the wishes of the members, who in April overwhelmingly declared themselves in favour of a buyout (76%) rather than a move to the new DC pension system.
The €45m pension fund of fuel trading company Calpam also concluded a buyout with Nationale Nederlanden where it bought a fixed indexation of 3% per year, after pension regulator DNB blocked a similar deal by Lifetri last June. Shortly after, Lifetri announced its departure from the buyout market.
DNB blocks Pensura
Pensioenfonds Pensura, another small pension scheme, has long intended to conclude a buyout with an unnamed insurance firm, but has not yet received the green light from regulator DNB.
“We had counted on a positive response from DNB in October. Unfortunately, DNB still had questions,” a statement on the fund’s website said. “This means we still have some steps to take. This requires care, but we are working hard to be able to transfer not much later than intended.”
Pensura invests some €230m for about 440 members and had a funding ratio of 139% at the end of July.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra
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