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PFZW, PWRI resume merger talks despite economic climate

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PWRI, the €7.5bn Dutch pension scheme for disabled workers, and PFZW, the €179.4bn healthcare scheme, have resumed talks on a possible merger.

According to a statement published on the PWRI website, the schemes aim for a possible closing date of 1 January 2018.

Last February, the pension funds suspended merger talks after six months of negotiation, citing the poor financial and economic environment and falling funding rates.

Although financial and economic circumstances have not improved fundamentally, and funding rates have declined even further, the two schemes resumed their talks last month.

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According to PWRI, the schemes have used the break to gain clarity on the consequences of present financial circumstances.

PWRI said this period of reflection had yielded “a positive outcome”, and, consequently, the schemes are now continuing their efforts to merge by 1 January 2018.

PWRI has been compelled to pursue a merger due to changes in the Dutch Participation Act, which regulates employment of disabled workers.

The changes effectively ended the influx of new participants to the scheme.

PWRI’s annual report cites undisclosed disagreements as another reason why merger talks were suspended.

The supervisory board has called on the board of trustees to keep the break in the talks as brief as possible and to use the time to “review the issues that have arisen with PFZW”.

“If these can be resolved, the obstacle of the deteriorated financial position of the schemes can be resolved as well,” the supervisory board said.

In PWRI’s most recent annual report, trustee Marco Kastelein states that merger talks can be held only if the financial position of both schemes is sufficiently strong.

Since February, the financial position of both schemes has deteriorated further.

PWRI’s policy funding declined from 105.4% as at the end of January to 101.1% as at the end of June.

PFZW’s policy rate, meanwhile, fell from 97% to 92.5% over the same period.

The difference between the funding rates of the two schemes has remained virtually the same.

In PWRI’s annual report, the schemes accountability board stresses that “PWRI’s funding rate is higher than PFZW’s, and the board of trustees should capitalise on that”.

PWRI declined to comment on the resumption of merger talks.

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