GERMANY - Munich-based mechanical engineering group Man AG has today announced it has now set up its Pensionsfonds within its contractual trust arrangement (CTA).
"This modern form of retirement provision is an important step in the completion of fully funding our pension liabilities," Karlheinz Hornung, chief financial officer of MAN, said today.
MAN set up the CTA agreement in 2005 and been paying funds into the scheme. since then, so is now 90% funded.
IPE reported last month the DAX blue-chip company had received regulatory approval for the vehicle from the German financial services watchdog Bundesanstalt für Finanzdienstleistungsaufsich (BaFin).
MAN said in a statement today the fund has a volume of €850m and will provide benefits for around 26.000 pensioners, and had been entered into the trade register.
As previously reported, MAN follows the example of energy giant RWE, which set up a Pensionsfonds within its CTA and transferred most of its 40,000 current pensioners along with €4.3m in May this year.
Last year, Siemens also integrated a Pensionsfonds into its CTA.
IPE wrote at the time German companies were increasingly trying to get pension reserves off their balance sheets.
One of the solutions adopted by several listed German companies is to create a pension trust modelled on a CTA, mimicking Anglo-Saxon pension funds.
However, a Pensionsfonds, as a vehicle, can operate cross-border in Europe.
Siemens currently has only the pension assets of its German-based parent company Siemens AG within this arrangement, but the model might be extended in the future.
A spokesman for BaFin told IPE in November together with MAN, there are now 26 Pensionsfonds, six of which are occupational Pensionsfonds.
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