SNPF, the €1.2bn pension fund for notaries in the Netherlands, and SBMN, the €850m industry-wide scheme for notary employees, have announced their intention to merge on 1 January 2015.
The pension funds said their decision was a response to the decreasing market for notary services – following a slump in the housing market – and that it aimed at the benefits of scale for efficiency and cost-cutting.
They pointed out that the falling number of active participants meant lower income from contributions, while costs per participant were rising.
“At the same time,” they added, “the provision of pension plans, as well as asset management, has become increasingly complicated, and requirements for pension funds’ boards are continuously being raised.”
The schemes said their supervisory (RvT) and accountability boards (VO), as well as the regulator, had responded positively to their plans.
In the coming months, the schemes will look into how exactly the merger should be executed.
Stijn Marks, employers’ chairman at SBMN, said SNPF was likely to join the industry-wide scheme.
“In order to keep the new set-up simple,” he said, “we’ll try to develop one pension plan for all participants, possibly with additional modules for deviating arrangements.”
The new, and yet nameless, scheme is to be directed by a “lean and mean” pensions bureau, according to Eric Uijen, director at SNPF.
SBMN does not have a pensions bureau, while SNPF is in the process of scaling down its own bureau, following its recent contracting out of its pensions administration to TKP, which already acts as SBMN’s provider.
According to Uijen, both schemes will also look into the most desirable set-up for asset management.
SBMN has placed almost all of asset management with insurer Aegon, which has invested the assets through its own funds, while SNPF has six external asset managers.
Uijen said: “In principle, we want to follow current practice and focus on contracting out as much as possible.”
Both schemes stressed that the merger would not have consequences for accrued pension rights and current benefits.
The coverage ratios at SBMN and SNPF was 108.9% and 109.2%, respectively, as of the end of March.
Both schemes have cut pension rights twice, in order to stay on the mapped out route to recovery to the minimum required funding of 105%.