NETHERLANDS - DAGF, the €400m pension scheme for metal workers, has rejoined PME, the industry-wide pension scheme, to gain economies of scale under increasing regulatory pressure.

A statement issued today by PME and DAF revealed the smaller pension fund is moving back into the fold of the metal workers' pension scheme, increasing the value of PME's assets to €21.5bn.

The DAF scheme was previously managed by insurer Nationale Nederlanden, but the deal means its 4,500 employees and pensioners are retrospectively members of PME from January 1, 2006.

DAF employees were technically required to become members of the PME scheme when the industry-wide plan was first created, but the firm managed to gain an exemption from this requirement because it already offered employees access to a defined benefit scheme.

However, Bram van Else, a spokesman for PME, said officials have agreed to move the workers into the larger scheme as its size is seen as a benefit given the increasing pressures to comply with regulation and solvency standards.

"With all of the legislation in the Netherlands, there is more and more pressure on the smaller pension funds to keep their independence and the financials steady but DAF decided to go back to the industry-wide pension fund," said van Els.

The scheme amounts to less than 5% of PME's overall assets so the merger of additional members to 660,000 member base is unlikely to impact the metal scheme's asset allocation, stressed van Els.

Perhaps more noticeably, however, it does the value of the PME scheme again slightly, having fallen in value since the end of 2007 from €22bn to €21bn in the first quarter of this year as a result of market turbulence.

Van Els noted the markets are rising again it is anticipated PME's assets will return to approximately €22bn by the end of the second quarter.

PME's officials cover ratio was 122% at the end of Q1, but is now understood to be at around 125%.

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