ING pension fund abandons plans to divide into two schemes

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The €27bn closed pension fund ING has decided not to divide itself into two schemes in the wake of its sponsoring company splitting.

ING Group split into banking arm ING and asset manager and insurer NN Group in 2014.

On its website, the pension fund said that, after two years of deliberations, it had concluded that there was insufficient reason for such a move, as this would come at the expense of efficiency.

Since the division of ING – required by the European Commission, following government aid in the wake of the financial crisis – the two new companies have each set up new collective defined contribution (CDC) schemes for their staff.

Initially, the pension fund of ING indicated that a split might enable it to improve communication and to provide a more balanced approach to the two employers and their different stakeholders.

It suggested that indexation for the two groups of participants would diverge, as the sponsors could introduce different pay rises.

“A higher indexation for one group would mean a disadvantage for other groups, as indexation would come at the expense of the pension fund’s coverage ratio,” it said.

However, the pension fund, with 71,000 participants in total and a funding level of 136%, has now concluded that continuing as a single scheme is a good alternative.

It said it would seek to co-operate with the two new pension funds – ING CDC and NN CDC – within the existing structures, aimed at efficient pensions provision, joint communication, and joint policymaking.

It added that it would also look at the options for simplifying pension arrangements and their implementations.

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