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IPE special report May 2018

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Dutch financial sector to launch industry-wide pension fund

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  • Dutch financial sector to launch industry-wide pension fund

NETHERLANDS - A dozen employers in the Dutch financial sector are making preparations for a new industry-wide pension fund, which is set to become operational on 1 January 2014.

Named 'Pecunia', the new scheme will not only target financial companies, but also representative organisations, supervisors and affiliated firms, said René Maatman, of law firm De Brauw Blackstone Westbroek, who is supervising the process.

He said that pensions provider Cordares, the Financial Markets Authority and exchange firm Euronext were among the companies that wanted to participate in the new pension fund.

Clearing house LCH Clearnet, after-trade service provider Euroclear and experts integrity register DSI also want to join Pecunia, according to the legal adviser.

He added that the new industry-wide pension fund expected to start with approximately 3,500 participants and €1bn of assets under management

Maatman said he expected this to increase to €5bn within 2-3 years, following interest shown by other financial companies.

Currently, Euronext, AFM, Euroclear, LCH Clearnet and DSI are affiliated with the pension fund Mercurius, which has a coverage ratio of approximately 85%.

Maatman said cost-cutting and the benefits of scale were the main drivers behind the new pension fund.

Separating the scheme from the employers and making the pension plan IFRS-proof were additional reasons, he added.

According to the pensions lawyer, Pecunia aims at average salary arrangements based on a "very complete pensions contract".

"The initial funding must be at least 105%, and a detailed policy will be developed for new entrants and value transfer," he said.

Maatman indicated that, in order to ease entry, Pecunia would adopt a basic pension plan, with a yearly accrual of 1.75%, as well as a high franchise - the amount that is exempt from pension accrual - of €15,000.

He added that Pecunia's creators were considering starting as a multi-company scheme with ringfenced assets, to be outsourced to APG initially.

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