DENMARK - Four of the eight pension funds administered by Denmark's PKA have now merged to form one new DKK33bn (€4.4bn) fund - the Health Professionals' Pension Fund.

Parties involved in the deal cited cost savings, as well as greater control over changes in the pensions sector, as advantages of the move.

The new fund - in Danish, Pensionskassen for Sundhedsfaglige - will be a union of the Medical Laboratory Technologists' Pension Fund, which has DKK10.7bn in assets, the Occupational Therapists' and Physiotherapists' Pension Fund (DKK14.2bn), the Midwives' Pension Fund (DKK1.7bn) and the Danish Diet and Nutrition Officers' Pension Fund (DKK6.3bn).

With its combined membership of 48,000, the Health Professionals' Pension Fund will continue to work in cooperation with PKA, PKA said. At the end of 2010, PKA managed assets worth DKK137bn on behalf of the eight pension funds.

Carl Holst, chairman of the Occupational Therapists and Physiotherapists' Pension Fund, said: "The merger will strengthen the pension fund quite generally.

"With the amalgamation, we are creating a pension fund that will be robust in the face of the changes we see coming. In time, we will be capable of more than simply following along. Rather, we will be abreast of developments to such an extent we can set the agenda ourselves."

All four pension funds are now economically strong, he stressed, adding that this was one reason why the board had judged this to be a good time to join forces.

Peter Damgaard Jensen, managing director at PKA, commented on the potential cost savings of the merger.

"As a smaller pension fund, you are vulnerable and very sensitive to shifts in membership," he said. "Having many older or younger members costs money.

"At the same time, the Danish FSA is increasing the demands on trustee boards. It has already required the inclusion of an accounts specialist, and in a few years, there may be a requirement for a risk specialist. This kind of thing costs money for a small pension fund.

"The bigger the pension fund, the more robust it is against the fluctuations in economics and risks we are now experiencing."

The merger is subject to final approval by the Danish Financial Supervision Authority (Finanstilsynet).