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German insurer buys €1.8bn Pensionskasse in ‘run-off’ deal

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The Cofra Group, owner of fashion company C&A, has sold its German Pensionskasse to Frankfurter Leben-Gruppe (Frankfurt Leben).

In total, €1.8bn in assets run for C&A’s 50,000 current and former employees in Germany were transferred to the run-off platform.

The sale of Prudentia PK follows Frankfurt Leben’s purchase of AXA’s €3bn multi-employer Pensionskasse Pro bAV in February. The insurer now runs roughly €10bn of pensions and insurance assets.

Frankfurt Leben, which specialises in running closed asset pools, said it would continue to run C&A’s pension plan and make payouts.

“We are aware of the importance of occupational pensions for employees of the Cofra group, especially those of C&A and we will take on this responsibility unreservedly,” said Bernd Neumann, the insurer’s chief financial officer.

No statement was made by C&A or Prudentia on the deal, which is still subject to approval by German supervisor BaFin.

The sale of the Pensionskasse could be connected to rumours about a possible sale of C&A by Cofra, which has been reported in the German press.

Frankfurt Leben is owned by Chinese finance group Fosun and is one of several run-off platforms to have started operating in the German market over the past two years.

Life insurance companies and German Pensionskassen alike are struggling with the current low-interest rate scenario, which has challenged their ability to keep promises made in different market environments.

By selling businesses to run-off platforms, companies can take some liabilities off their balance sheet. Experts have also argued that pension plans with falling memberships can benefit from pooling together on such platforms.

Read more about run-off deals in Germany in the April issue of IPE.

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