The Dutch pension fund of Ernst & Young has placed its new pensions accrual with Cappital, the low cost defined contribution vehicle (PPI) established by insurer Aegon.

The scheme’s existing portfolio, worth roughly €1.3bn, as well as €45m of investments at participants’ risk, remained with the pension fund. The scheme was considering its future, it said in a statement.

Until now, its members – which also include employees of law firm HVG Law – accrued pensions under collective DC arrangements, with pension claims reinsured with Aegon.

However, when the contract expired at the end of 2017, it wasn’t possible to renew the contract on the same terms because of low interest rates.

A spokesman for EY said that the employer had concluded that the old pension plan didn’t provide for a satisfactory pension, and also cited rising life expectancy.

Because of the lack of new pension arrangements, the contract with Aegon had to be extended by six months, but against a much lower annual accrual rate, which had dropped from 1.75% to 0.93%.

At Cappital, members will accrue their pension in an individual DC plan with two lifecycle investment profiles and the option to directly purchase a pension income from Aegon.

EY added that participants would not be allowed to transfer individually accrued assets to their pensions pot at Aegon’s PPI, and added that it would like to make the reinsured capital at Aegon contribution-free.

At 2017-end, the EY scheme had 4,350 active participants, 11,100 deferred members and 2,200 pensioners.

Last month, Aegon announced plans to merge its two PPI offerings, Aegon PPI and Cappital, into a single product.