NETHERLANDS - The first so-called ‘multi-opf' will soon become a reality in the Netherlands through a merger between the two corporate schemes of SCA.
This new legal entity, allowing corporate schemes to merge their boards without merging the actual funds, was signed into law earlier this month and is widely hoped to offer smaller corporate funds a means to survive in an increasingly complex environment by joining forces.
The two corporate schemes of SCA - SCA Hygiene Products Nederland pension fund and pension fund ‘The Anchor' - have signed a letter of intent to merge into a multi-opf. The two schemes are hoping for the merger to take effect by January 1, 2011.
"We're hoping to get the new multi-opf structure going by the start of the new book year 2011," said Mathijs van Gool, director-secretary of the two schemes. "We really need the time between then and now, as this is terra incognita. We have to make a few inventions and work out the details of the merger. There's plenty of homework still to be done."
For one thing, the two schemes haven't quite worked out which type of merger would be best from a practical standpoint. "We'd rather not opt for a liquidation scenario. We'd prefer to have a single legal successor to the two funds, so as to minimize the legal hassle involved," Van Gool continued.
In addition, the name of the new multi-opf has not yet been determined. "We are considering whether we should include the term ‘multi-opf' in the name to indicate that is the legal framework under which we operate," said Van Gool.
The funds' trustees also view the multi-opf route as an opportunity to pool governance resources: "We expect pension fund governance to become even more complex in the future, with even higher demands of pension funds' expertise and organisation. That's why we are deliberately choosing to organise our governance in a multi-opf so that we are ready to face the challenges of the future. We believe that is crucial," Van Gool added.