Munich-based financial services group HypoVereinsbank (HVB) is to set up and manage the new German industry-wide chemical workers’ pension fund.
The news comes after HVB signed a letter of intent with the German chemical industry employers’ association Bundesarbeitgeberverband Chemie (BAVC) and its union, Industriegewerkschaft Bergbau, Chemie, Energie (IG-BCE), to establish a sector-wide pension fund in the form of a limited company.
The deal represents the first concrete agreement to set up a company of this kind, despite a series of collective bargaining agreements recently in Germany between employer associations and trade unions, influenced in part by the Riester pensions reform.
HVB is to set up the new company in Munich next year, with a mandate to provide ongoing administration services thereafter. In addition it will provide technical and systems support and expertise. HVB will own 100% of the new company’s capital.
There will be an investment committee to determine the eventual investment strategy of the fund’s assets and select one or more asset managers. The committee will be assisted by an as yet unnamed independent investment consultant. There will also be regular manager reviews.
The new fund has a potential membership of 590,000 and is initially intended to act as a top-up system to existing retirement provision arrangements. However, both the BAVC and IG-BCE expect that a majority among the industry’s 300,000 “younger” workers will choose the new pension fund as their main retirement provision vehicle.
HVB was selected by the BAVC and IG-BCE following a “tight” contest with other financial institutions.
The supervisory board of the company will have six members, including two representatives from the BAVC and two from the IG-BCE. The remaining two will represent HVB.

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