Bpf Tex, the €260m pension fund for the wholesale textile industry in the Netherlands, is looking to join Detailhandel, the €18bn scheme for the retail industry.

It said merging with Detailhandel would increase its flexibility on pensions accrual and contribution levels, thereby improving the scheme’s chances of bridging a 5-percentage-point funding gap.

Bpf Tex is the first pension fund to join Detailhandel since the retail scheme fashioned itself as a “magnet fund”, seeking to attract other funds in the retail and wholesale – both food and non-food – sectors.

Joost Borm, chairman at Bpf Tex, said his pension fund would seek to exploit the flexibility afforded by the merger to bridge the funding gap between his scheme and Detailhandel through reduced pensions accrual relative to Detailhandel’s arrangements over the first year.

He said Bpf Tex’s social partners would be able to change the accrual rate if the price of a pension were to change in future.

According to Borm, the textile industry’s social partners had accepted a possible rights cut of 2%.

He added that the scheme’s 140 pensioners would be exempt from a rights discount, as this would have little impact on its coverage ratio.

Henk van der Kolk, chairman at Detailhandel, told IPE sister publication Pensioen Pro that providing flexibility during the merger process was of particular importance to his scheme, and that maintaining many different pensions plans was not its primary goal.

Traditionally, the €21bn pension fund PGB has been seen as the scheme offering differentiated pensions accrual and contributions for each sector it serves.

Borm acknowledged that PGB had been shortlisted as a potential merger partner but said its use of the market interest rate as a merger criterion would have been very disadvantageous for Bpf Tex’s predominantly young participants.

Bpf Tex has 18,400 participants and deferred members, compared with Detailhandel’s 1m participants.

The former spent €373 per participant on administration and 0.26% on asset management, while the latter spent €50 and 0.22%, respectively.

Bpf Tex’s funding stood at 100.5% as of the end of August, while coverage at Detailhandel stood at 105.8%.

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