TrueBlue, the €362m Dutch scheme for the IT sector, wants to join a larger pension fund as it is too small to grow independently.

On its website and in its annual report, the non-mandatory scheme said it had abandoned its efforts to become the pension fund for the Netherlands’ digital industry.

Hans Keukelaar, TrueBlue’s secretary, said he couldn’t say how many providers the pension fund was negotiating with, nor whether it preferred to join another sector pension fund or a general pension fund (APF), the dominant consolidation vehicle in the Netherlands.

However, he indicated that the scheme wanted to continue its existing defined benefit (DB) and defined contribution (DC) arrangements.

“But if a new partner offers a better pension plan, we will adopt it,” he said, adding that the contribution could be lower as well.

Last year, TrueBlue’s costs per participant rose from €607 to €693, largely due to advisory costs for exploring its future as well as significantly higher expenses for actuarial services and accountancy.

Its asset management costs of 45bp remained unchanged from the previous year.

The decision to join a larger scheme means that TrueBlue has given up on its plan to grow to 5,000 active participants through employers joining voluntarily. At 2018, the number of workers totalled 2,678.

Keukelaar explained that the limited size of the pension fund, which had a funding ratio of 98.3% at March-end, in itself hampered growth.

“Despite our attractive offer of DB and DC arrangements and combinations of these, as well as a young participant population, potential clients told us we were simply too small,” he said.

At the same time, the scheme had to deal with reorganisations at affiliated employers, which further increased costs.

According to the scheme’s secretary, continuing independently wouldn’t be in the interest of the pension fund’s participants. He said he expected that employers that refrained from joining TrueBlue initially would change their minds once it had joined a larger scheme.

In its annual report for 2017, the pension fund indicated that it was assessing the options for co-operation or a merger after its supervisory board and accountability body asked for a detailed plan for possible consolidation.

In order to increase its attractiveness, it had changed its name to TrueBlue and added a DC plan to its DB scheme in 2014.