NETHERLANDS - The large pension provider MN Services and insurer Eureko's pension division Syntrus are in an advanced stage of negotiations about a merger, both players have confirmed.

If the merger talks succeed, the two organisations - with assets of €65bn and €45bn respectively - will become the second largest pension provider in the Netherlands.

In terms of combined numbers of participants, the new company will by far be the largest, providing services to 6.5m workers and pensioners.

"A merger fits within the trend of consolidation on the Dutch pension market, with the benefits of scale and lower costs for the participants as the main driving force," Geertjan Cath, spokesman of MN Services pointed out.

According to Cath, the merger talks were triggered by last year's decision of the €22bn pension fund for the metal and electro-technical engineering industry PME to appoint MN as its asset manager.

At the same, PME indicated it was also considering transferring its pension administration to MN Services, which is also the asset manager and pensions provider for the €34.5bn pension fund for metalworking en mechanical engineering PMT.

Until last year, PME's asset manager and pension administrator was PVF Achmea, which has recently become part of Syntrus.

One of the conditions for a merger is that MN Services will have the most important say in the new organisation, its spokesman made clear.

"Moreover, we want to keep our business model. Although MN Services is market-oriented, it is still owned by employers and employees and is therefore in a different position to a pure market player like Syntrus," he added.

MN Services has been successful in attracting new clients in recent years. During the last couple of months it attracted the €3.2bn occupational pension fund for the Dutch merchant navy and the €150m scheme for the wheel and tyre industry.

However, its acquisition of PME's business gave it the critical mass to compete at the top level of pension provision, MN Services' chairman Ruud Hagendijk told IPE last year.

"We have already indicated to be keen to start discussions with MN Services half a year ago. Cooperation made sense, because MN was already provider for metal scheme PMT," a Syntrus spokesman commented.

Syntrus declined to provide any details about the current negotiations.