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BVV doubles Pensionsfonds assets with SEB addition

Berlin, Germany

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Swedish banking group SEB has outsourced its German defined benefit (DB) pension assets to the pension provider for the German financial sector, BVV.

The transfer brings the BVV Pensionsfonds’ assets to almost €1bn, the company noted in a press release.

The volume of the pension asset transfer was not disclosed but at the end of 2017 assets in the BVV Pensionsfonds stood at around €357m.

BVV confirmed to IPE that it was “correct to assume the assets had almost doubled” since the transfer of SEB’s German pension plan.

The DB plan assets cover the accrued benefits for around 6,000 beneficiaries.

SEB said the “total costs” for the outsourcing were SEK891m (€85.9m).

Prior to this outsourcing, BVV was already responsible for the administration of SEB’s German DB plans.

“By taking on the pension liabilities we will take care of all administrative tasks and the pension assets,” said Helmut Aden, board member at BVV, in a press release.

He explained that outsourcing pension plans had become more common over the past few years as “the difficult interest rate environment had increased the pressure on internally financed models”.

Aden added that the increasing regulatory requirements was placing a growing administrative burden on companies with Direktzusagen, which are DB plans with benefits paid direct from company balance sheets.

In July, Standard Chartered transferred its German pension plans to BVV. 

The Pensionsfonds is only one of the pension vehicles the BVV offers, the largest being its Pensionskasse.

In total, the BVV group runs roughly €28bn in assets for companies from Germany’s financial and banking sector.

For SEB, the transfer formed part of a restructuring of its German business. The Swedish banking group dissolved SEB AG in Germany in January 2018 and turned the operations into a branch of the SEB Group.

In its annual report SEB said: “The purpose of the change is to simplify the reporting and administration of the German operations. The non-core business that was not transferred to the branch from SEB AG will be dismantled over time.”

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