GBP, the €55m industry-wide scheme for wholesale flower and plant growers in the Netherlands, is to join PGB, the €20bn pension fund for the Dutch printing industry.
The smaller scheme is to merge its assets with those of PGB on 1 January, pending regulatory approval, according to GBP employee chairman Gerard Roest.
In the past, local insurers have criticised that pension funds from other industrial sectors, or “alien” schemes, are allowed to join the scheme for the printing industry, as they consider this unfair competition.
With the news, GBP – a non-mandatory scheme – follows in the footsteps of Zeevisserij, the €100m industry-wide scheme for offshore fisheries, which also intends to join PGB.
Both pension funds are to accrue pensions under an individual defined contribution plan, which would also be provided by the printing scheme, in addition to its defined benefits arrangements.
Jetta Klijnsma, state secretary for the Social Affairs Ministry, cleared the way for “alien” schemes to join industry-wide pension funds.
Responding to questions from Parliament, Klijnsma said different sectors would be allowed to place their pension plans with a single industry-wide scheme if the companies and workers involved wished to do so.
Roest said: “Joining PGB means the wholesale sector for flowers and plants can still achieve the desired mandatory participation for employers.”
In his opinion, such status is required to improve current pension arrangements.
GBP’s contribution is no more than 14% of the pensionable salary.
According to Roest, this is too low to join other industry-wide schemes, such as those for the retail and grocery sector, because their basic pension plans are more expensive.
He said his scheme had also ruled out the low-cost PPI DC pensions vehicle, as it lacked the possibility for mandatory participation.
Neither was the new, so-called ‘general pension fund’, or APF, an option, he said, due to the time involved in gaining the required legal status.
GBP is under pressure to secure alternative pension provision for its 6,500 participants, as it considers itself too small to carry on independently.
Roest said administration costs now stood at €283 per participant and were rising rapidly.
At PGB, these costs would be reduced by 50%, he said.
Further, asset manager APG terminated its contract with GBP as of 1 January, as it considered the scheme “too small”.
Since that time, GBP has kept its assets in an NN Investment Partners money market fund.
Roest said his scheme was keen to transfer assets to PGB as soon as possible to start generating “proper” returns again.