The pension fund for furniture makers (Meubel) and the scheme for the wood processing and yacht building industry (Houtverwerkende Industrie en Jachtbouw, PHJ) have announced their intention to merge into a new €6.5bn fund.

The funds signed a declaration of intent last week to transfer PHJs pension rights to Meubel by 1 January 2022. Pensions regulator De Nederlandsche Bank (DNB) is yet to approve the plan.

The announcement is the second pension fund merger that has been announced within a week. Last week, the Zoetwaren and Bakkers fund also said they were joining forces.

The combined funds would have some 120,000 members and €6.5bn in assets under management. Meubel is by far the biggest of the two funds, with €5.9bn in assets and 100,000 members.

The two funds will still have to bridge a large gap in funding ratios before they can merge. Meubel’s funding ratio was 105.9% at the end of January, while PHJ’s funding ratio stood at 94.5%.

“We are currently investigating how to deal with the difference in funding ratios,” said PHJ president Jeroen van den Heuvel. The example of Bakkers and Zoetwaren, which have delayed their merger until their transition to the new defined contribution-based pension system, is the two funds’ ‘plan B’, said Meubel president Petra de Bruijn.

“It’s a very interesting option,” she said, adding that the eventual choice about the timing of the merger will be up to PHJ.

The pair see “many reasons” to join forces, they said. “The two sectors are similar which facilitates cooperation, larger funds are better able to deal with changes and there are financial benefits like increased cost efficiency,” according to De Bruijn.

The merger with PHJ follows Meubel’s takeover of the fund for the wood trade Houthandel last year. Eventually the fund wants to grow its assets under management to €10bn. It’s therefore open to more funds joining them in the future, said De Bruijn.

BlackRock will stay on as the new fund’s fiduciary manager. “Eventually, PHJ will be liquidated. We will try, however, to take over as many of their investments as possible in kind, as long as these fit with our investment policy,” De Bruijn said.

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