The pension funds of Dutch regulators De Nederlandsche Bank (DNB) and the Financial Markets Authority (AFM) have concluded that setting up a joint general pension fund (APF) at present would be infeasible.
The DNB scheme said in its newsletter that a joint working group had concluded the vehicle “would not be a sustainable solution at present”.
It added that a joint operation, mooted for 1 January 2017, would have come too soon, “not least because of the complexity of the matter”.
According to the newsletter, both schemes will continue to explore other means of working together, although DNB conceded the chances of a joint APF built solely for the pension funds of both regulators were “slim”.
The AFM scheme, which declined to comment, said in its latest newsletter that it was preparing “concrete steps” to place its pensions “elsewhere”, and that it would provide more clarity on the matter later this year.
The pension fund said it was “in a hurry” to join a larger entity due to high costs, and that it was exploring a number of options, including the possibility of joining a commercial APF.
In 2014, the €145m AFM scheme had to pay €653 for each of its 1,000 participants for pension management, and 0.62% of its assets for asset management and transactions.
DNB’s pension fund, which manages €1.6bn for 4,800 participants, reported costs of €361 and 0.50%, respectively, over the same period.
The large difference in the two schemes’ coverage ratios would hinder any direct merger.
At February-end, funding at the AFM scheme stood at 94.6%, while coverage at DNB’s pension fund was 111.2%.