NETHERLANDS - PME, the €21bn industry-wide pension fund for the mechanical and electrical engineering, has formally chosen MN Services as its fiduciary manager, it announced.

The move will create the largest non-commercial pensions provider in the Netherlands, with assets under management of €58bn, and serving over 1.7m participants.

MN Services is already pensions provider for PMT, the €32bn industry-wide scheme for metalworking and mechanical engineering.

In addition, the parties will start discussions on the appointment of MN Services as PME's pensions administrator, they said in a joint statement.

As part of the deal, PME will acquire a 40% stake in MN Services while the social partners - employers and employees - will remain owner of the provider, they added.

According to both parties, the expansion of MN Services' clients base will mean greater purchasing power, higher investment limits and pooled expertise.

"This will bring higher returns, lower administrative costs and more flexible services, which will ultimately lead to better pension conditions for everyone in these sectors," they stressed.

Transfer of the management of PME's assets is planned for early July.

No jobs will be lost as a consequence and the parties expect employment even to grow in the future, they said.

PME's assets are currently managed by 35 external and commercial parties worldwide in 45 mandates. This situation will hardly change for the time being, spokesman Bram van Els said. MN Services has contracted out 70% of its assets in a similar model. 

PME's pensions administration is being carried out by PVF Achmea at present but discussions on the transfer of the scheme's administration will start in the autumn, PME and MN said.

"If the talks on transferring PME's administration to MN Services are successful, it will simplify things for our participants and for employers in the sector. Many workers switch jobs between both sectors. A single administrator would make life easier for all," Hans van der Windt, PME's Chief Pensions Officer commented.

"Being the single asset manager for both pension funds, we now have sufficient critical mass to play a decisive role in the future, on both national and international financial markets. That will make us attractive to existing and future clients," Ruud Hagendijk, chairman of MN Services, added.

MN Services also provides services to other company pension funds, e.g. floor coverings manufacturer Forbo, funeral services provider Yarden and food producer Cargill.

A full merger between both metal pension funds is not likely in the near future PME's Bram van Els told IPE. "The differences of schemes, and costs levels due to differences in age build-up, are still too big."