PWRI, the €7.3bn pension fund for disabled workers, is considering joining the €166bn healthcare scheme PFZW, according to its chairman.

In January, the scheme announced that it was talking with three pension funds as potential merger partners, after it closed to new entrants.

Chairman Kees Bethlehem said that PFZW had emerged as a favourite, as it was expected to best uphold the defining characteristics of PWRI.

As examples, Bethlehem cited PFZW’s low franchise – the part of the salary that is exempt from pensions accrual – as well as PWRI’s award-winning way of communication with its disabled participants.

“PFZW thinks it could learn lessons from us,” Bethlehem said.

According to the chairman, the negotiations would in part focus on the relatively low life expectancy of PWRI’s participants.

Their longevity is four years lower than the average, whereas PFZW’s participants comprising healthcare workers have a relatively high life expectancy.

PWRI has been closed to new entrants since the beginning of the year, following new legislation – the Participation Act – which prescribes that disabled workers are to be employed at regular companies, and also join their pension plan.

The pension fund still has 100,000 active participants in social workplaces, but local councils are expected to abolish these social workshops.

As a result of the gradual ageing and thinning of the population of active participants, the contribution would have to increase significantly, Bethlehem pointed out. “That would pose a problem for the mid and long-term.”

He indicated that PWRI wanted to conclude the negotiations with PFZW by the end of the year, and to subsequently join the healthcare scheme from 1 January 2017.

However, he emphasised that his pension fund would not join PFZW at any cost.

“As we won’t have a problem for the short term, we retain the option of continuing independently if the negotiations were to collapse.”

If the pension fund for social workplaces were to join PFZW, it would have to replace its current provider and asset manager APG with PGGM.

In 2012, it had already moved from Syntrus Achmea to APG and, more recently, appointed F&C Asset Management an €880m real estate and mortgage mandate.

Bethlehem declined to say which two pension funds dropped out of the negotiations earlier this year.

PWRI and PFZW have 219,000 and 2.6m participants respectively in total. At June-end, the funding of PWRI was 106.4%. PFZW’s coverage stood at 103%.

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