The Dutch Nedlloyd Pensioenfonds (NPF) said it would transfer the pension rights accrued in its individual defined contribution plan as well as further accrual for its active participants to insurer ASR.
Frans Dooren, the pension fund’s director, said he expected the collective value transfer of €17m of accrued IDC assets of 500 workers and 300 deferred members to be completed in May.
He added that the transaction was subject to approval of pensions supervisor De Nederlandsche Bank (DNB) as well as the scheme’s participants on details of the transfer.
The value transfer follows the scheme’s decision not to extend the contract for pensions provision, and to close to new entrants as of 1 January 2020.
It will continue to manage €1.4bn of defined benefit assets of 2,975 deferred members and 6,900 pensioners.
Earlier, NPF had concluded that continuing the IDC plan would not benefit the pension fund or its active participants.
According to Dooren, the initial expectation that more Dutch subsidiaries of employer Maersk Group would join the IDC plan had not materialised.
“Because the limited number of participants, and the fact we are an ageing and shrinking scheme, the IDC arrangements didn’t offer sufficient perspectives,” he pointed out.
When the IDC plan was launched in 2015, it was a ground-breaking initiative, as it enabled workers to converse their pension capital – accrued through a tailor-made life-cycle plan with Robeco – into pension rights ahead of retirement.
New legislation for defined contribution plans also complicated matters for the pension fund.
As the concept of a drawdown pension was also introduced by other providers, more alternatives became available to Maersk subsidiaries that hadn’t yet joined NPF, Dooren explained.
He said the pension fund wanted to continue independently as long this was financially attractive, as it pays €60m in benefits annually.
At the end of December, the scheme’s coverage ratio stood at 121.3%. NPF granted its participants and pensioners a 2% inflation compensation as of 1 January.
A year ago, the scheme’s pensions administration – running on the program Lifetime – moved to RiskCo, after the IT firm had taken over pensions provision from Aon.
The move was initially meant for a one-year period, as NPF first wanted to get familiar with RiskCo as well as the company’s own administration system.
However, the pension fund has now decided that it would assess the situation annually. “We are not in hurry, because we are content so far,” said Dooren.