GERMANY - MetallRente, a pension fund targeted at Germany's engineering industry, says it acquired more than 2,000 corporate clients last year - the most since its launch five years ago.
As a result of the acquisitions, MetallRente said it now provided services to nearly 11,000 firms in its target industry.
Almost 40,000 workers joined the industrywide arrangement in 2006, bringing the total to around 200,000. The total market potential for the pension is estimated at 1.5m workers in engineering.
Contributions last year were €45m. Over five years, sponsors and members have paid in €781m. "These results show that we have more than entrenched ourselves in our target industries. Indeed, we have become the industry standard," commented Heribert Karch, MetallRente's chief executive.
Launched in early 2002, MetallRente provides three separate defined-contribution schemes, including the insurance-type Direktversicherung and Pensionskasse as well as the equity-oriented Pensionsfonds.
According to Karch, the Direktversicherung and the Pensionskasse had net returns of 4.4% and 4%, respectively in 2006. "Those returns were entirely within the industry norm for both vehicles and impressive if you consider our cost structure," Karch told IPE from Berlin.
Indeed, both due to the imperative of providing a guaranteed minimum return (2.25%) as well as tight regulation, returns for German Direktversicherungen and Pensionskassen have largely hovered around 4% in past few years.
Meanwhile, Karch said MetallRente's Pensionsfonds finished last year with a return of 11.1%, down from 17.5% in 2005. The vehicle, which follows the prudent man rule to investing, has 79% in equities, 5% in fixed income and 15% in cash.
Despite the Pensionsfonds' higher return, MetallRente's Direktversicherung and Pensionskasse remained by far the most popular vehicles among the insured. According to the fund, the Pensionskasse accounted for €23m of the €45m in contributions last year, while the Direktversicherung made up €21m. The remaining €1m went to the Pensionsfonds.
German insurance giant, Allianz holds a majority 55% stake in MetallRente. The other 45% stake in the fund is shared between life insurers R+V, Volksfürsorge, Swiss Life and Victoria Leben.
Allianz Pension Partners, a 60-member pension sales and advisory firm, is in charge of selling MetallRente within the metalworking and engineering industries. Allianz Global Investors, meanwhile, assists on the fund's portfolio management.