The merger of the €4.4bn Wonen fund with the €31bn Detailhandel scheme, the sector fund for the Dutch retail industry, will finally go ahead at the end of this year, pending approval from regulator DNB.

The fund for furniture dealers, which has been closed since 2018, had been trying to merge with Detailhandel since 2011. New accruals have been with Detailhandel since 2018, but the large difference in funding ratios between the two funds had prevented a full merger so far.

However, the funding ratio gap has largely disappeared this year thanks to rising interest rates.

Wonen benefited more strongly from this than Detailhandel because of its lower interest rate hedge. As a result, the funding ratio gap has shrunk from 6 percentage points at the end of 2020 to 1.2 percentage points at the end of August.

The value transfer can therefore most likely take place without a cut in pension rights for Wonen members, according to the fund’s president Guus Wouters.

Wouters added Wonen has locked in the remaining difference in funding ratios by increasing its interest rate hedge. The remaining difference could be bridged if Detailhandel indexes pensions next year and his fund doesn’t, he said.

Trade fund

President Henk van de Kolk of Detailhandel hailed the upcoming merger as “another step in our long-term ambition to become the go-to fund for the trade sector”.

Detailhandel announced this ambition in 2016. Since then the funds for alcoholic drinks, shoemakers and textile wholesalers have been absorbed by Detailhandel.

Wonen is not to be confused with Meubel, the scheme for furniture makers that saw its planned merger with Houthandel, the scheme for the wood processing industry, collapse earlier this year.

Van de Kolk said Detailhandel remains open for other sector funds. “We are in conversation with other schemes,” he said, adding that additional mergers are unlikely to take place next year.

“We don’t want to rush things, and the transition to the new pension system is keeping us busy. It may be better to execute other mergers after the pension transition.” he added.

TNT Express joins Vervoer

The closed company pension scheme of TNT Express will merge into €37bn Vervoer, the sector fund for the transport industry, as of 1 December.

Since 1 January this year new accruals of the fund, now part of FedEx, have already been at Vervoer. TNT Express has €1.1bn in assets.

To read the digital edition of IPE’s latest magazine click here.