GERMANY - French industrial firm Saint Gobain has outsourced €518m in German pension liabilities to Deutscher Pensionsfonds AG (DPAG), an equity-oriented pension fund launched by Deutsche Asset Management (DeAM) and the Swiss insurer Zurich.
The liabilities stem from more than 50 defined benefit schemes that Saint Gobain had offered in Germany. The schemes insure 11,500 retired and 2,400 active Saint Gobain employees.
Saint Gobain employs around 18,000 people in Germany. The pension liabilities for the other active German employees remain with the French firm.
Edouard Koeune, chief financial officer for Saint Gobain Germany, said the firm chose DPAG in part because of its "modern approach to investing as well as professional implementation of the client's needs".
How DPAG would invest the €518m Saint Gobain entrusted to it was not disclosed.
Created in 2002 as a result of government pension reforms, Pensionsfonds like DPAG were Germany's answer to the Anglo-Saxon pension fund. That means they are equity-oriented and invest according to the prudent man rule.
DPAG said the Saint Gobain mandate made it the biggest Pensionsfonds not tied to a German company. The largest company-tied Pensionsfonds is that of Siemens, which was set up last September to finance almost all of the technology firm's €14bn in pension liabilities.
Several other Pensionsfonds have been launched by German insurers and banks to chase pension business within corporate Germany.
Prior to news of DPAG's mandate, Chemie Pensionsfonds, a pension fund for the German chemical sector that belongs to Munich-based bank HVB, had claimed market leadership with €95m in assets.
Although non-company-tied Pensionsfonds had a very slow start after their beginnings in 2002, they have since caught following steps by the government in the summer of 2005 to improve their competitiveness.
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