The Dutch multi-company scheme Pon said it would split into three separate pension funds, as merging its three compartments would be too complicated.

On its website, the pensions vehicle of family firm Pon, said it aimed to complete the move before next year, when the multi-scheme – the predecessor of the consolidation vehicle APF – ceases to be legal

The new pension funds will be the €974m scheme of Pon Holdings with 8,700 participants, the €121m pension fund of Gazelle (1,700 participants) and the €153m closed scheme of Geveke (2,000 participants).

Last year, Pon announced it had rejected the option of placing the three schemes in an APF, in part because of high costs.

It had subsequently concluded that merging the compartments, to get a balanced result for all participants and pensioners, was too complicated, said Dick Mik, chair of the multi scheme.

“We found that, under the current market conditions, a merger would turn out positively for certain groups, but would be negative for others,” he explained.

Mik said that the fact that two compartments have reinsured arrangements, whereas the other hasn’t, had made the assessment complex.

At the end of December, the coverage ratio for Pon Holdings, Gazelle and Geveke stood at 104.3%, 112.5% and 105.4%, respectively.

Mik said the board is aware the new pension funds Gazelle and Geveke are likely too small to continue independently for the long term, and indicated that the ultimate goal is to merge both schemes.

“Based on the interest rates level and other market conditions by then, we will assess annually whether the circumstances are right. Meanwhile, we must co-operate and keep down costs by organising the governance and administration in a clever way.”

Mik said he didn’t exclude the possibility the schemes will separately join existing company pension funds or an APF, but highlighted that the employer would like to keep the schemes together.

“We have already looked at these scenarios and decided not to continue with the options,” he said.

Pon is the last multi-company scheme in the Netherlands. The vehicle turned out not to be a success, and no more than four have ever been established.

With the introduction of the general pension fund (APF), the existing multi-company pension funds have a five-year period to transfer or liquidate.